Columbus McKinnon Corporation

Good morning, ladies and gentlemen, and welcome to the Columbus McKinnon First Quarter 2027 Earnings Teleconference and Webcast. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press Store 0 for the operator. I would now like to turn the conference call over to Kristine Moser, VP, Investor Relations and Treasurer. Please go ahead.

Thank you and welcome everyone to our call. On today's call, we will be covering our first quarter fiscal 2027 financial and operational results. On the call with me today are David Wilson, our President and Chief Executive Officer, and John Linker, our Chief Financial Officer. Welcome, John. In a moment, John 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.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 like to remind you that management will refer to certain non-GAAP financial measures. You can find reconciliations to 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. Also on today's call, we will make references to pro forma metrics which adjust for both the Keto Crosby acquisition and the divestiture of the legacy Columbus McKinnon U.S. power chain hoist and chain operations as if each transaction had been completed prior to the beginning of the prior year period to improve the comparability of results across time spans. 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. With that, I'll turn the call over to David.

Thank you, Kristine, and good morning, everyone. We are off to a strong start in fiscal 2027, Q1 was our first full quarter operating as a combined company following the Keto Crosby acquisition and the team delivered a solid performance across orders, sales, profitability, and cash flow. Pro forma sales grew 10% with broad-based growth across all platforms. We continue to advance our strategic priorities, operational excellence, commercial effectiveness, and customer experience and these initiatives are improving our competitiveness and strengthening our foundation for sustainable growth. Volumes are building in the Americas and Asia Pacific, while EMEA remains softer in the near term, consistent with what we're seeing in PMI and industrial production data. Our end market exposure is diversified and we're seeing particular strength in targeted verticals including defense, infrastructure, energy, e-commerce Data Center, Shipbuilding, Electrification and Pharma, as well as the broader automation and general industrial markets in North America. We are also seeing increased activity in oil and gas, some of which is related to the conflict in the Middle East. Automotive demand has been spotty, and general industrial demand in pockets of EMEA remains soft, as previously shared. Our scaled platform, enhanced customer value proposition, and business initiatives are driving market share gains in targeted segments. This growth is also supported by ongoing commercial initiatives and early revenue synergy wins. We continue to see elevated input costs given the macroeconomic and supply chain environment. Even so, our supply chain has remained resilient, and we've been effective in implementing pricing actions to offset unavoidable inflationary pressure. Over the long term, we've demonstrated consistent pricing discipline and we remain confident in our ability to secure price where required. Adjusted EBITDA of $111 million increased 242% with adjusted EBITDA margin of 21%. When normalizing for the impacts of the acquisition and divestiture in the prior year period, Q1 adjusted EBITDA margins expanded approximately 300 basis points. Adjusted EPS grew 11 cents to 61 cents from the prior year period on an as-reported basis. And we delivered positive Q1 free cash flow for the first time in six years versus what has been a typical seasonal cash outflow, enabling us to reduce debt in the quarter, our top capital allocation priority. These results exceeded our expectations driven by strong execution, favorable demand dynamics, and some cost benefits specific to the quarter. I want to thank our more than 7,000 global team members for their dedication and disciplined execution throughout the quarter. Given our strong start to the year, today we are raising our sales, adjusted EBITDA, and adjusted EPS outlooks for fiscal 2027. We will talk you through those details shortly. Overall, we're pleased with the quarter and with how the team has remained nimble in the face of unique business conditions. We also remain encouraged by the opportunities in this market and focused on delivering to our near-term commitments while positioning the company for long-term success. Underlying demand signals, particularly in the U.S., support the durability of our momentum. Strong order growth and a healthy backlog position us well. However, our outlook continues to reflect a level of uncertainty given the environment in EMEA. On the integration front, we are making meaningful progress, bringing our teams together and aligning people, processes, and systems. Although we are still early in the journey, the combined organization is operating effectively as one team, and we are moving quickly to capture synergies. We have executed initiatives that should position us to outperform our synergy target for the year, and these early wins reinforce our conviction for achieving, and potentially exceeding, our 70 million net annual run rate cost synergy target over time. First-year cost synergies will be weighted towards SG&A, driven by organizational realignment, the removal of redundancies, the elimination of duplicate third-party spend, and contract harmonization. As previously shared, We also see significant potential for future cost of goods sold synergies. We are advancing plans to capture revenue synergies, and early wins give us confidence that this will be additive to organic growth. Fully realizing the opportunity will take time as we align resources and integrate technology and sales processes, but we continue to believe revenue synergies will be a meaningful tailwind over time. We are demonstrating our ability to execute effectively, and our value creation opportunities remain largely within our control. We are advancing our integration plans and building momentum to deliver sustained organic growth, capture synergies, generate cash, and reduce debt, unlocking substantial long-term value for all stakeholders. Now, I'm pleased to introduce you to our new Chief Financial Officer, John Linker, who joined the company earlier this month. Jon is a proven leader with extensive financial leadership experience, expertise in global industrial manufacturing environments, and a consistent track record of delivering impactful results with a focus on profitable growth, operational performance, and successful integrations. Since joining a few weeks ago, Jon quickly immersed himself in our business and began contributing meaningfully. We're excited to have Jon on board as we continue executing our value creation strategy on behalf of our shareholders, customers, and employees. With that, I'll turn the call over to Jon to walk us through our first quarter results.