Columbus McKinnon Corporation

Good morning and welcome to Columbus McKinnon's first quarter fiscal 2026 earnings conference call. My name is Marissa and I will be your conference operator for today. As a reminder, this call is being recorded. I would now like to turn the conference over to Kristi Moser, Vice President of Investor Relations and Treasurer.

Thank you and welcome everyone to our call. On today's call, we will be covering our first quarter fiscal 2026 financial and operational results. On the call we've made today are David Wilson, our President and Chief Executive Officer, and Greg Rustowitz, our Chief Financial Officer. In a moment, David and Greg will walk you through our financial and operating performance for the quarter. The earnings release and presentation to supplement today's call are available for download on our investor relations website at .cmcl.com. Before we begin our remarks, please let me remind you that we have our safe harbor statement on slide two. During the course of this call, management may make forward-looking statements in regards to our current plans, beliefs, and expectations. These statements are not guarantees for future performance and are subject to a number of and uncertainties and other factors that can cause actual results and events to differ materially from the results and events contemplated by these forward-looking statements. I'd also like to remind you that management will refer to certain non-GAAP financial measures. You can find reconciliations of the most directly comparable GAAP financial measures on the company's investor relations website and in its filings with the Securities and Exchange Commission. We see our earnings release and our filings with the Securities and Exchange Commission for more information. Today's prepared remarks will be followed by a question and answer session. We respectfully ask that you limit yourself to one question and one follow-up question. With that, I'll turn the call over to David.

Thank you, Christine. Good morning, everyone. In the first quarter, we delivered results that were in line with expectations as the quarter progressed largely as anticipated. We delivered another quarter of orders growth with orders up 2% -over-year to a total of $259 million. This was driven by 8% growth in project-related orders and particular strength in EMEA. Order performance also improved throughout the course of the quarter, peaking in June. Short cycle orders were down 4% in the quarter as surcharges and price increases were implemented and the markets digested the impact of tariffs. Our backlog is now up $67 million or 23% versus the prior year to $360 million as longer cycle project orders associated with our targeted commercial initiatives are more than offsetting recent softness within short cycle markets. As we've discussed previously, short cycle orders remain more sensitive to channel dynamics impacted by policy uncertainty and an evolving macroeconomic landscape. Over time, we anticipate this demand will stabilize and that attractive opportunities from industry megatrends like nearshoring, scarcity of labor, and infrastructure investments will emerge. But we anticipate the next few quarters may remain choppy. While macro uncertainty remains, we continue to see strength in vertical end markets where we've been building a leadership position like battery production, e-commerce, food and beverage, aerospace, oil and gas, and rail projects. Additionally, we are focused on strength in orders related to the Department of Defense in the U.S. as well as increased defense investments globally. We are also starting to see potential benefits from end markets heavily impacted by tariffs like steel and heavy equipment to maximize the productivity of their existing U.S. facilities. While there is a lot in the news about announced production investments and expansions, it's still early days for many of those investments. Given our products are late in the investment cycle for new production, we expect that customer requests for these projects will serve as a tailwind over time. P1 sales came in modestly ahead of expectations and down 2% from the prior year driven by a 3% decline in short cycle sales largely as a result of the previously mentioned tariff environment and a slower than expected macro recovery in Germany. As we projected last quarter, tariffs were a headwind to operating profit and margins with a $4.2 million impact to gross profit and a 180 basis point impact to gross margin in the first quarter. We continue to expect tariffs to be a $10 million headwind to operating profit impacting margins and adjusted EPS in the first half of the year. We are targeting the achievement of tariff cost neutrality by the second half of fiscal 2026 as our mitigation actions including price adjustments take greater effect as we progress throughout the course of the year. We also expect to achieve margin neutrality over time, but that will likely occur in fiscal 2027 as we work through our backlog. Our Q1 SG&A was down 5% excluding $8 million of keto Crosby related expenses and approximately $1 million of other non-core adjustments as we manage expenses to offset volume and mixed pressure. As a result, we delivered adjusted EPS that was slightly ahead of expectations and we are reaffirming guidance for the full year. I would like to thank our entire Columbus McKinnon team for all that they are doing to advance our business on behalf of our customers and our shareholders. Despite what has been a volatile start to the year in light of an evolving tariff policy and macroeconomic landscape, our team has remained focused on execution, providing our customers with the best experience possible while managing costs with discipline, implementing mitigation actions and advancing acquisition preparedness. We remain enthusiastic about the pending keto Crosby acquisition which we expect to scale our business, expand customer capabilities, enable synergies and over time accelerate our intelligent motion strategy. As we announced at the end of May, we received a second request related to our final regulatory approval requirement. This request was consistent with expectations and is a fairly standard step in the regulatory review process. While the exact timing remains uncertain, we continue to anticipate deal closure by the end of the calendar year. I will now turn the call over to Greg to take you through the details of our first quarter financial results and guidance.