The earnings release and presentation to supplement today's call are available for download on our Investor Relations website at investors.cmco.com. Please see our earnings release and our filings with the Securities and Exchange Commission for more information. 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. 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. Adjusted EPS improved $0.12 sequentially to $0.62 in the second quarter, reflecting higher sales, margin expansion, and continued cost management. 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 conveyor systems and light rail workstations 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.
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. Over time, we expect lower interest rates and megatrends including reshoring, automation, and scarcity of labor to drive incremental demand. 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.
| Metric | Period | Current guidance |
|---|---|---|
| Net sales growth | FY2026 | Low-to-mid single-digit growth (raised) |
| Adjusted EPS | FY2026 | Flat to slightly up (reaffirmed) |
| Net tariff cost impact | FY2026 | ~$10M, with cost neutrality targeted by end of FY2026 and margin neutrality in FY2027 |
| Capital expenditures | FY2026 | Roughly $15–$20 million |
| Kito Crosby close / leverage at close | By end of FY2026 | Close by end of fiscal year; net leverage roughly in the high-4x range at close |
| Metric | YoY | Note |
|---|---|---|
| Net sales | +8% to $261M | Higher volume, pricing and favorable currency across all platforms (led by lifting and linear motion); Q3 backlog pulled forward into Q2. |
| Adjusted EPS | $0.62 (-$0.08 YoY, +$0.12 sequentially) | Sequential gains from higher sales and margin, but down year over year on tariff impact. |
| GAAP EPS | $0.16 | Weighed down by $9.9M Kito Crosby deal costs and $1.1M business-realignment costs. |
| Adjusted EBITDA | $37.4M; 14.3% margin | Higher volume and cost management, partly offset by tariffs and mix. |
| Adjusted gross margin | 35.3% (-100 bps YoY) | Tariff and mix headwinds, offset sequentially by improved absorption and $11.1M lower factory-consolidation/startup costs. |
| Orders | $254M (-3%) | Tough prior-year comp on >$20M of project orders and slower EMEA/APAC conversion; U.S. orders up 11%. |
| Backlog | $352M (+11%) | Growth across all platforms on commercial initiatives, though down 4% sequentially after the Q2 shipment pull-forward. |
| Free cash flow | $15.1M | Earnings growth and working-capital improvement, net of $2.5M of acquisition deal costs paid. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| U.S. short-cycle stabilization | Tariff-driven disruption in Q4/Q1 as channel partners drew down inventory | Short-cycle activity rebounded robustly in the U.S. and is expected to continue through the second half, supported by price increases and end-market strength in heavy equipment, steel, aerospace and defense. | — |
| Tariff mitigation | ~$4.2M net tariff impact in Q1 | Q2 net tariff impact moderated slightly; full-year net impact held at ~$10M with a few million spilling into Q3, targeting cost neutrality by end of FY2026 and margin neutrality in FY2027 as surcharges convert to price. | — |
| Kito Crosby integration readiness | Deal pending; HSR/DOJ review | Substantially complied with the DOJ second request; stood up a dedicated IMO and board oversight subcommittee, secured committed financing and syndicated the bridge/$500M revolver, now targeting close by end of fiscal year and rapid post-close deleveraging. | — |
| Project pipeline vs. conversion | Healthy funnel | Record-level quotation funnels in most product categories, but award decisions – especially in Europe amid a deteriorating macro – are taking longer than expected to convert to orders. | — |
| Margin mix dynamics | — | A heavy backlog of lower-margin crane solutions is offsetting higher-margin ramps at the Mexico linear-motion factory, montratec and automation, keeping second-half gross-margin guidance pressured by roughly 100 bps of year-over-year tariff impact plus mix. | — |