Columbus McKinnon Corporation

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

Thank you and welcome everyone to our call. On today's call, we will be covering our second quarter fiscal 2026 earnings financial and operational results. On the call with me today are David Wilson, our President and Chief Executive Officer, and Greg Restowitz, our Chief Financial Officer. In a moment, Greg and David 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 investors.com. That's cmco.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 risks 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 the 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. Please 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. Our team delivered results in the second quarter that were ahead of expectations as we capitalized on record backlog and saw stabilization in U.S. short cycle order activity. We also made meaningful progress on our operational improvement, tariff mitigation, and integration preparedness initiatives. I would like to thank our entire Columbus McKinnon team for their dedication and continued focus on performance and execution. Net sales increased 8% year-over-year to $261 million, with growth across all product platforms as short-cycle demand stabilized, and we accelerated deliveries from Q3 to meet evolving customer delivery requirements. Sales were up broadly, and we delivered volume growth in both the U.S. and EMEA, our two largest regions. Adjusted EPS improved 12 cents sequentially, to 62 cents in the second quarter, reflecting higher sales, margin expansion, and continued cost management. Margins improved sequentially, driven by improved absorption on higher volumes and the early translation of tariff mitigation actions. As expected, year-over-year adjusted margins were down due to tariff and sales mix impacts, in addition to an incentive compensation accrual release in the prior year. Last quarter, we estimated the net tariff impact in Q1 was approximately $4.2 million. As price increases begin to replace tariff surcharges, it is becoming more difficult to calculate net tariff specific impacts. Nonetheless, we estimate that our Q2 net tariff impact moderated slightly from Q1 levels. Despite the constantly evolving tariff landscape, We continue to expect tariffs to be a net $10 million headwind to operating profit in the fiscal year. Given latest developments, however, we now expect this impact to spill over into this quarter, and we are now targeting the achievement of tariff cost neutrality by the end of fiscal 26. We still expect to achieve margin neutrality in fiscal 27. Orders were 254 million, down 3% year-over-year, as the prior year benefited from three significant project orders totaling over 20 million within our precision conveyance and rail businesses. While our pipeline of quotation activity remains healthy, the weaker economic landscape in EMEA and APAC is resulting in slower conversion for project orders. In the U.S., we saw order growth of 11% with strong performance in both project-related and short-cycle categories. reflecting a strengthening demand environment, the stabilization of U.S. short cycle volumes, and the implementation of price increases to offset tariffs. Over time, we expect lower interest rates and megatrends, including reshoring, automation, and scarcity of labor to drive incremental demand. We are capitalizing on our leadership positions in end markets with notable tailwinds, such as aerospace, energy, rail and transportation, metals, heavy equipment, and defense. We also remain focused on the vertical end markets benefiting from secular growth trends, where we have been building a leadership position, such as battery production, e-commerce, life sciences, and food and beverage. Our backlog is a healthy $352 million, up $34 million, or 11% versus the prior year, with increases in all platforms as we've continued to execute on our commercial initiatives. Strong execution to meet evolving customer delivery requirements resulted in the accelerated conversion of Q3 backlog into Q2 shipments. As a result, current quarter backlog came down 4% year-over-year, which is expected to impact Q3 sales volume. While we remain laser-focused on the performance of our core business, we continue to advance integration preparedness for the pending acquisition of Keto Crosby. We have established an Integration Management Office, or IMO, that is executive-led and reports into me, as well as a board subcommittee that will provide governance and oversight related to integration initiatives and our performance versus plan. The IMO will be comprised of dedicated executive and cross-functional leaders from both companies to ensure the realization of our combined company integration and synergy objectives. This will enable core business leaders and teams to focus on ongoing business activity operational performance, and improving customer experience. We remain enthusiastic about the strategic combination of our companies, which will scale the business, enable synergies, expand customer capabilities, and accelerate our intelligent motion strategy over time. Following integration, we'll be over $2 billion in sales, delivering top-tier industrial margins and strong cash flow performance that enables reinvestment in our business after deleveraging. Our team continues to prepare for the closing of the acquisition as quickly as the regulatory process will allow, and we now expect the transaction to close by the end of our current fiscal year. I will now turn the call over to Greg to review the details of our second quarter financial results and full year guidance.