David Wilson; President, Chief Executive Officer, Director; Columbus McKinnon Corp
Gregory Rustowicz; Chief Financial Officer, Executive Vice President - Finance; Columbus McKinnon Corp
Matt Summerville; Analyst; D.A. Davidson & Co.
Good morning, and welcome to Columbus McKinnon's Second Quarter Fiscal 2025 Earnings Conference Call. My name is Eric, 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 Kristine Moser, Vice President of Investor Relations and Treasurer.
Thank you, and welcome to Columbus McKinnon's second quarter fiscal 2025 earnings conference call. The earnings release and presentation to supplement today's call are available for download on our Investor Relations website at investors.cmco.com.
On the call with me today are David Wilson, our President and Chief Executive Officer; and Greg Rustowicz, our Chief Financial Officer. In a moment, David and Greg will walk you through our financial and operating performance for the quarter. Before we begin our remarks, please let me remind you that we have our Safe Harbor statement on Slide 2.
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 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.
With that, I'll turn the call over to David.
Thank you, Kristine, and good morning, everyone.
Before we begin, I know we've all been attentive to the impact that Hurricanes Helene and Milton have had on communities across the Southeast region of the United States. Given CMCO's footprint across this region, this hits particularly close to home for us. In the wake of these storms, Columbus McKinnon has taken a variety of actions to care for our team members, our customers and the communities that have been impacted.
I'd like to thank our team members and our partners who rallied and assisted with these efforts to provide equipment and aid in support of our neighbors. In some areas there remains a long road to recovery ahead and we will continue to partner with our teams to assist with the recovery efforts that are underway.
Now shifting to the quarter. In Q2, orders increased 16% year-over-year with a book-to-bill ratio of 1.08 as we continue to gain traction with our commercial, vertical market and customer experience initiatives. As expected, sales were down year-over-year driven by our linear motion factory move to Monterrey, Mexico, the phasing of automation project backlog and the timing of EMEA project revenue.
In addition, at the end of Q2, the impact of Hurricane Helene resulted in a plant closure and productivity disruptions at several locations that pushed shipments out of Q2. Despite this impact, sales were in line with guidance.
Profitability in the quarter was impacted by a few unique items that we previously discussed, including a $23 million non-cash pension settlement; $12 million of costs related to the closure of our linear motion facility, $7 million of which were non-cash; and $4 million of start-up costs related to the move of production to Monterrey, Mexico.
Given these impacts and mix dynamics margins were lower than the record levels realized in the prior year, partially offset by cost management initiatives. On an adjusted basis, we delivered $0.70 of earnings per share in line with expectations and including impacts from Hurricane Helene.
In the quarter, we also began to leverage our share repurchase program and completed $5 million of repurchases in September. This month we completed another $5 million of repurchases under a 10b5-1 plan. While we remain committed to deleveraging our balance sheet, we see share buybacks as an attractive use of capital given current interest rates and our valuation.
Looking more closely at orders, we saw order growth of 16% year-over-year, which was driven by strength across all geographies and product platforms. We saw a particular strength in precision conveyance, which was up 42%. While montratec-led this growth given recent project business wins, all precision conveyance platforms were up greater than 20% year-over-year.
As we discussed last quarter, we've become the supplier of choice for PowerCo's battery production gigafactories in Valencia Spain; St. Thomas Canada; and Salzgitter Germany for intralogistics technology within their battery manufacturing processes.
We received our first $9 million order in Q1, a second $9 million order in Q2, and two additional orders are in the pipeline for Q3, which are likely to exceed $10 million. We continue to see a long runway for future business as we support the execution of their plans.
Automation, which was softer entering the year, saw strong order increases with 24% order growth year-over-year. Overall, order growth was driven by our project business.
Short-cycle orders remained stable despite what has been a dynamic macro environment where destocking pressures uncertainty and delays in decision making persist.
This performance illustrates the power of our strategy the strength of our commercial initiatives and the early stages of customer experience improvements that are tied to operational initiatives and are leading to market share green shoots.
Overall, the project funnel remains healthy reflecting our customer-centric focus, targeted end market growth initiatives, channel diversification efforts, and recent new customer engagements. This encouraging funnel for growth gives us confidence in our ability to execute our guidance for the second half and provides a strong pipeline for fiscal 2026 sales.
Order rates are encouraging as we enter Q3 as well, including the first of a multi-order project with a large existing e-commerce customer. Backlog increased 8% sequentially, in line with prior year levels, primarily driven by the strength of our order book.
Short-term backlog is elevated given impacts related to Hurricane Helene and our linear motion plant consolidation in Monterrey, Mexico. Driven by project timing, the phasing of our fiscal year 2025 shippable project backlog is weighted towards Q4 and supports our full year guidance.
Customer experience remains a priority and we expect normalization from current levels of backlog over time as we continue to improve lead times and this leads to shorter customer order cycles as customers don't need to order as far in advance.
Before I transition to Greg, I want to emphasize that we are gaining traction with our strategic initiatives and remain laser focused on operational execution. Our growth initiatives are delivering early results within targeted vertical markets such as battery production, e-commerce logistics, and food and beverage which are tied to attractive secular growth trends.
Within core markets, improved customer experience, commercial initiatives, and differentiated offerings are enabling growth. In Q2, we launched our new battery-powered hoist in partnership with Milwaukee Tool, offering a first-of-its-kind mobile one-ton hoist that leverages standard battery technology.
Our margin expansion initiatives are tied to structural changes that are advancing per plan and are expected to deliver 200 basis points of improvement over time. Our second half forecast is Q4 weighted given the phasing of our backlog and we are well-positioned for fiscal year 2026, given the traction we are gaining with key initiatives.
Given the longer term project mix increase in our backlog, we are modestly reducing our fiscal year 2025 guidance to reflect a shift in delivery to fiscal 2026. We remain confident in our strategy and our ability to increase scale, compound growth, and realize our long-term financial objectives.
With that, I will turn it over to Greg to take us through the financials.
Gregory Rustowicz
Thank you, David. Good morning everyone. We delivered second quarter net sales of $242.3 million, in line with the guidance we gave even with the impact of Hurricane Helene on our factories in the Southeast at the end of the month, which impacted revenue by about $3 million to $4 million.
Sales were down 6% year-over-year, primarily driven by the volume impacts of Hurricane Helene, the move of our linear motion factory to Monterrey, Mexico, and the timing of project backlog globally.
US sales were down 9%, given that most of the unique items in the quarter were in the US, while EMEA and APAC were only down 3%, driven by the timing of project backlog. As David discussed, project orders were up 33%, while short-cycle orders remained stable in the quarter as we advance customer experience initiatives, win new customers and capture market share even in a challenging market environment. We are encouraged with our sales funnel, and we have significant opportunities on the horizon across all of our platforms with particular strength in precision conveyance.
Our gross profit decreased $25.2 million versus the prior year on a GAAP basis, impacted by $12.9 million of expenses for the closure of our Charlotte facility and the ramp-up of our Monterrey, Mexico facility. This includes $6.8 million of non-cash asset impairment charges. The remainder of the decline was due to lower sales volume and mix. On a GAAP basis, our gross margin was 30.9% and on an adjusted basis, our gross margin was 36.3%, driven by the lower volumes and unfavorable mix.
Our mix was unfavorable due to lower sales of our higher-margin businesses compared to a year ago, specifically lower sales of Montratec, lower sales in the US and the factories impacted by Hurricane Helene and the mix within our EMEA Linear Motion business, which is more heavily weighted to rail projects in the quarter.
With the lower sales volume in the quarter, the team managed our SG&A expense appropriately as costs decreased $2.7 million to $56.4 million. This was driven primarily by cost management actions and lower incentive-based compensation. As a result, we generated operating income of $10.8 million in the quarter on a GAAP basis and adjusted operating income of $27 million.
Adjusted operating margin was 11.1% in the quarter. We recorded a GAAP loss per diluted share for the quarter of $0.52, which includes a non-cash pension settlement charge for the termination of one of our US pension plans. When tax affected, this charge affected net income by $17.5 million or $0.61 per share. EPS was also impacted by $11.8 million of factory simplification and start-up expenses, also tax affected at a 24.6% tax rate.
Adjusted earnings per diluted share of $0.70 was in line with our guidance, adjusting for a $0.03 per share impact from Hurricane Helene. Our adjusted EBITDA was $39.2 million in the second quarter with an adjusted EBITDA margin of 16.2%. Free cash flow year-to-date is roughly in line with the prior year. Negative free cash flow of $11.4 million in the first half of the fiscal year reflected normal working capital seasonality in our business.
CapEx in the first half was approximately $10 million compared with the prior year. Free cash flow conversion for the quarter on a trailing 12-month basis was 227%, reflecting strong cash flow conversion and the impact of the non-cash pension settlement and asset impairment charges on net income.
From a balance sheet perspective, we paid down $30 million of debt in the first half of the fiscal year and anticipate paying down another $30 million in the second half. We expect interest expense to decline by $6 million in fiscal year 2025 versus fiscal year 2024, driven by the proactive repricing of our term loan debt in March, which reduced our borrowing rate by 51 basis points, the early impact of the Fed cutting interest rates and our aggressive debt repayment.
Our net leverage ratio was 2.7 times on a financial covenant basis, in line with the prior year. We now expect our net leverage ratio to decline to 2.3 times by the end of fiscal year 2025. This is slightly higher than our initial expectation, reflecting the impact of the share repurchase activity that David highlighted and higher working capital levels to support our Q4 sales.
Let me wrap up with our updated guidance for fiscal year 2025 in the third quarter, which reflects the current macroeconomic environment and the timing of our project backlog. In the third quarter, we expect sales growth and adjusted EPS to be flat to the prior year. For the full year, we are updating our fiscal 2025 guidance to flat to low single-digit sales growth year-over-year, mid-single-digit growth in adjusted EPS, CapEx for the full year is expected to range between $20 million to $25 million, and our net leverage ratio will end fiscal year 2025 at approximately 2.3 times.
We remain confident in the health of our business and our ability to achieve our long-term objectives. Operator, we are now ready to take questions.
Operator
(Operator Instructions)
Jonathan Tanwanteng, CJS Securities.
Charlie Strauzer
Hi, good morning.It's actually Charlie Strauzer on for John. Just a couple of quick questions, if I could. Any chance we can get a little bit more quantification of the impact of the hurricanes in Q2? And are there any lingering issues heading into Q3?
David Wilson
Yes, sure. Did you say Charlie? I couldn't quite hear the name when you.
Charlie Strauzer
Yes, Charlie Strauzer. I'm sorry.
David Wilson
Hi, Charlie. Good morning. Okay. So, yes, the hurricane resulted in the closure of our Damascus, Virginia facility for about five days and disrupted several other facilities in the Southeast that we operate. And while we incurred no property damage, sales shifted into the first week of October.
And while it's difficult to gauge the exact impact across our full footprint, given the nature of the storm, the impact of the closure in Damascus was approximately $2 million of delayed sales, and we estimate the balance of the impact across multiple facilities to be about that same amount. And so, in total, we saw about $4 million worth of disruption associated with the hurricane. And the EPS impact of that $4 million of sales would have been about $0.03 a share.
Charlie Strauzer
Great. That's helpful. Thank you. And just a follow-up, if I could. Industrial and especially EU, German end markets are weakening. Where are you seeing kind of offsetting strength?
David Wilson
So that's true. German markets are soft at the moment, and there's concerns about those that you see in the markets. We've done a great job of working, I think, across multiple markets in the European and Middle Eastern geographies to generate opportunities for the business with our total portfolio. And I think the team there continues to do a nice job in that environment.
We've seen great opportunities in the battery production space specifically, and then, in oil and gas. I'd note those as two specific markets as we think about Europe notably. More broadly, for the markets across the world, we see defense and ag as being strong. We also see aerospace remaining strong with further potential. And the utility markets in the US have seen an uptick with recent hurricane activities.
Charlie Strauzer
Great. Thank you. You’re welcome.
Operator
Matt Summerville, D.A. Davidson.
Matt Summerville
Yes.Thanks. David, you obviously quantified just now the impact on revenue and EPS with respect to the hurricane. But can you guys maybe parse out what sort of impact you would have had on the top line? Is it related to the manufacturing relocation of Mexico, the timing you talk about with respect to kind of some things moving around from a project standpoint? And specifically on the project side, what pushed into fiscal 2026? I just want to make sure I'm clear on that. Then I have a follow-up.
David Wilson
Sure. Yes. So, as you think about that linear motion footprint consolidation, we were impacted by sales of approximately $4 million there, and that remained in backlog and is expected to ship in Q3.
Now, this is roughly in line with the expectations we had as we entered the quarter and communicated in our Q1 results. I think the team did a nice job executing throughout the transition.
We shipped our last order out of Charlotte in August, and all production from then forward was manufactured and shipped from the new facility. So the team in Monterrey is up and running. They're doing a great job at scaling and building momentum around that transition and they're focused specifically on more mechanical actuation and the engineered to order capabilities that we need to make sure we bring to full scale in this quarter.
And so, we expect a quarter this period, that will be more or less in line with where previous production levels had been, but that $4 million is what moved out of the quarter associated with the linear motion move.
And then more broadly, we saw if you recall, in the Q1 call, we talked about automation orders being down in Q1, and that led to less backlog to ship in this quarter. And so, automation impacted the shift by about $5 million, let's say. Precision conveyance was about $3 million. And linear motion, more broadly in Europe, was about $3 million.
Matt Summerville
Got it. And then you mentioned PowerCo earlier. It sounds like you got nine in Q1 another nine in Q2 another 10 in Q3. What ultimately as you look over the next two to three years, what could that aggregate opportunity ultimately look like for you guys between those three factories in terms of orders and therefore ultimately revenue if things sort of break your way if you will?
David Wilson
Right. So we've characterized the opportunity as a nine-figure opportunity. So you should be thinking about it in terms of north of $100 million of opportunity on the orders and sales side. And there's a whole lot of additional customer activity as you think about this market specifically and the opportunity for us given our application-specific and advantaged process technology to support that manufacturing process.
Matt Summerville
Got it. Thank you, guys,
Operator
Steve Ferazani, Sidoti.
Steve Ferazani
Good morning, Dave. Good morning, Greg. Appreciate the detail on the call. I want to ask about the 3Q guide, because you talk about $4 million still in backlog because of the relocation of Monterrey and then $4 million pushing out because of hurricane disruption.
Given that additional revenue and I know 3Q is your seasonally slowest, is there any negatives in 3Q? Because I would have expected your 3Q guide to be a little bit better given the amount of revenue that pushed into that quarter.
David Wilson
Yeah. Steve exactly and certainly anticipated this question and understands the nature of the question. It's really related to the mix of backlog that we have to work with as we enter the quarter.
Nothing more broadly happening there, it's simply the fact that we have received a number of very attractive orders and our backlog is now more heavily weighted towards project activity that simply phases in the backlog into Q4 and then into 2026, fiscal 2026.
And so our short-cycle business has been stable. And that's been encouraging despite the uncertainty in the macroeconomic backdrop and awareness that we have that there's a level of pressure around destocking with national distributors and some of the private equity-backed distributors out there that are focused on working capital and managing that in a more precise way.
And so that action along with the macroeconomic uncertainty has led to some pressure in the short-cycle space but we've been stable there. And so there's nothing really that's happening. It's just a matter of how the activity phases in the backlog the project business that is.
Gregory Rustowicz
Yeah. Steve, I'll add one other point on the linear motion production in Monterrey. So we will ship the past due backlog that we had as of the end of September, but the team is ramping up to speed. We've hired 100 employees since March roughly 50 in Q2. So they'll get to a full run rate but we don't anticipate that they'll be able to maintain above what a full run rate is to catch up on the revenue.
David Wilson
Right. So a full run rate plus that, not going to be achievable in this quarter.
Steve Ferazani
So some of that $4 million could push into Q4?
David Wilson
Not that specific $4 million, but $4 million in the aggregate, right.
Steve Ferazani
It would just mean other stuff would push out. Okay.
Gregory Rustowicz
Okay. Correct.
Steve Ferazani
And I want to ask about the gross margin. I know that obviously there was a lot of noise which you covered in the quarter and you talked about mix. But when you look at what's in backlog and now you probably have a sense of directionally margins. Do you get back to where you were before this quarter? Can you get higher based on what you're seeing in backlog right now and the pricing of it?
David Wilson
Yeah. Of course, we certainly are focused on the longer-term objectives we have as a business to get to that plus or minus 40% in gross margin. And we have mix contributors in this quarter that were tied to some of the volume push-outs in the quarter that I talked about in automation, and some of the higher-margin portions of a business that I referred to earlier.
We also had lower volume as you know year-over-year. So the combination of lower fixed cost absorption tied to the volume reduction and the mix shift really led to that margin outcome in the quarter. And we had anticipated a large percentage of that given the way we're forecasting the business and that translated into the guide that we gave. And as we work through this quarter, we expect to continue to see improvement from that level. And over the long-term, we expect to deliver improvements that take us to that targeted level over time.
Steve Ferazani
Thanks, David. Thanks.
David Wilson
Thanks, dude.
Operator
Walt Liptak with Seaport Research.
Walter Liptak
Hey, thanks. Good morning, everyone. Thanks for the detail about the Monterrey ramp and things like that. I wonder if you could just help us understand a little bit about – we've done a lot. Maybe just review what we've done so far in Monterrey. And what's the next step? Is it – do we have something left to do in 2025? Or is it now we look to 2026 for the next phase?
Gregory Rustowicz
Yes. So Walt, so what we've done to date is back in January we announced that we had the new facility up in Monterrey. So it's been in the planning phase and early execution phase really since – before June of 2022. So it's been a while because this is a very complex project that we've got. And so to date, we started in the January time frame and consolidated a small lifting facility that we already had in Mexico. So the Charlotte linear motion consolidation was the next one, which took place here – really we announced it in July. August was a bit of a messy transition.
And as David mentioned we're out of it in September and going forward. But our plans all along expected that there could be more consolidation that would take place over time. And as we talked about in our June Investor Day, we expect in total this to result in roughly 200 basis points of gross margin improvement coming from this. And we're working to obviously, ramp up what we already have and are thinking through what our next steps would be which in terms of planning.
Walter Liptak
Okay, great. And then just switching gears over to the short-cycle business. You characterized it as stable. I wonder if you can provide a little bit more detail. Was it stable across the board in the geographic regions? And I guess we're mostly focused on US but did you see anything getting a little bit better some of our industrial companies are starting to see some improvement here just kind of in the recent months in the US?
David Wilson
So I'd say largely stable as I indicated across the business. And where we saw pockets of weakness, it was related to some of the destocking pressures that I mentioned earlier with the national and more consolidated channel partners. And I would say that that was true primarily in the United States. And then in Europe, where we have a lifting distribution portion of our business, there's been some pressure there on order rates for that portion of our short-cycle business.
Walter Liptak
Okay. Yeah. Okay.
David Wilson
And through the first few weeks of October, though, I would say that orders are up across the short-cycle segment by mid-single digits. So, stability in the second quarter and encouraging performance as we think about where we are so far in Q3.
Gregory Rustowicz
Yes and Walt just to add on what we typically see in our fiscal third quarter ending in December is we do see the channel manage inventory levels as they typically do at the end of their most of them have fiscal year-ends of 12/31 and they might have bank lines that they need to report on. So that's a typical phenomenon we would see. And also certainly with the election uncertainty, I think there's been a little bit of reluctance from a channel perspective to add inventory. But we think once that uncertainty clears up then we should see a rebound again.
Walter Liptak
Okay, great. And then I think in the prepared remarks, excuse me, you just talked about, e-commerce. And you know, I wonder if you could provide some more detail about you've got a new e-commerce customer or an existing one that, sounds like it's ramping. Can you talk about that? And you know what the final might look like around precision conveyance and e-commerce?
David Wilson
Sure. Absolutely. And so we're really excited about developments in that particular vertical market. We have both existing and new customers that are you know, expanding their activity in the space. And so we see quotations and order activity up in that in that particular vertical market. It early in this quarter, we just mentioned in the prepared remarks, we took an order, a multi a multi order opportunity related to sorting processes for existing warehouses within an existing customer environment that translates across the entire footprint of their you know, their investment for warehousing space. And so really good opportunity that we're excited about being selected for and that will deliver over the next couple of quarters. And it's the beginning of what we think is going to be a nice run of new investment across that space with existing and new customers for the company.
Gregory Rustowicz
Yes. And just to reiterate what Dave said on the call, Walt, is, we saw outstanding order growth in precision conveyance, up 42% year-over-year and orders in really all three of the recent acquisitions were up 20% plus. So, we couldn't be happier about the performance from an order perspective.
Walter Liptak
Okay, great. And it sounds like some of those e-commerce orders you've just gotten first phases of what should be, you know, much larger funnel. Is that the way we should read it?
Gregory Rustowicz
Yes.
Walter Liptak
Okay, great. Thank you.
Operator
James Kirby with JPMorgan.
James Kirby
Good morning guys. Thanks for the question here. I just wanted to clarify I guess if you take out the hurricane impact, is that really the driver of the top line guide down? Or are there other moving parts in the back half of the year to consider there?
David Wilson
No, it's a combination of the hurricane and then the backlog phasing going into the second quarter. And we had guided down from Q1 or we didn't have a guide for Q2 at that point, but we guided Q2 at a level that was lower than prior year deliberately knowing that we had the backlog phasing that we mentioned and then we had the move to Monterrey incorporated. And so those were the two big drivers outside of the hurricane impact.
James Kirby
Okay. That's helpful. Thanks. And then my second question, just with montratec, I know it's kind of grouped into your other conveyance segment now. But it seems to be growing well above I guess what you were pacing for when you made that acquisition. Is that the right way to think about it? And I guess and I believe you were asked this last quarter, but is that really do you think that's because of the integration across the portfolio? Or are there other macro factors there impacting that?
David Wilson
Yes. And when we think about the precision conveyance platform within the company, we really think about just as that. It's a combination of select technologies that are market-leading in their own right, whether it's belted precision conveyance, flexible conveyance, accumulation technology or asynchronous conveyance with the montratec acquisition and we're offering a comprehensive solution that becomes advantaged because of the combination of those technologies in many cases for certain applications.
And so, yes, montratec is doing incredibly well. The other businesses are doing well as Greg just referenced with order rates up above 20% across all of the segments of that platform from a product perspective.
And then, with montratec specifically that asynchronous conveyance, the footprint that it's advantaged with it's a smaller footprint product. It's highly efficient from an energy consumption perspective. It's precise. It's fast. It has a heavy payload.
And it's something that is gaining traction in multiple markets, but most notably, the battery production space and the combination of the team's inroads into key areas and the Columbus McKinnon backing and the way we came together as a company with our balance sheet and we've added capacity for that business within the first year of ownership that really allows us to scale, has positioned us to be nicely advantaged. I'd also say that the integration across our geographies bringing teams together that can really sell that product more broadly represent it more broadly is helping too.
Gregory Rustowicz
And James what we did what we said when we bought montratec was that we expect it to double revenue in a three-year period of time from roughly $30 million to $60 million. And so we think we're on track.
James Kirby
Right. Okay. No, it sounds good. I appreciate the color, guys. Thanks.
David Wilson
You bet. Thank you.
Operator
of Steve Ferazani with Sidoti.
Steve Ferazani
Thanks, guys. I just had a quick follow-up on capital allocation. You did highlight that the modest share repurchases in 2Q and already in 3Q. Given that second half of the year is typically stronger for cash flow generation easily covers those $30 million you've guided for in debt repayments any thoughts on becoming a more aggressive repurchaser? I know that's a Board decision, but if you could comment on that?
Gregory Rustowicz
Yes. So we see it as an appropriate tool in our toolbox on capital allocation. Certainly with interest rates falling now we model the impact of share repurchases versus debt paydown. And with falling rates and with where the stock price has been we feel that it's an excellent opportunity to buy our stock back. But having said that with to your point our expected cash flow in the second half of the year we do anticipate being able to repay down an additional $30 million of debt and still hitting the $60 million guidance number that we've previously spoken about.
Steve Ferazani
Great, thanks. Right.
David Wilson
Thanks, Steve.
Operator
This concludes the question-and-answer session. I will now turn the call back over to Mr. Wilson for closing remarks. Please go ahead.
David Wilson
Thank you, Eric and thank you everyone for joining us today. Our team continues to execute our strategic initiatives, improve our customers' experience and make significant progress on our simplification initiatives. We delivered on our guidance in the second quarter adjusted for the impact of Helene and delivered one of our highest order growth quarters ever with outsized performance in precision conveyance which will be a tailwind to margins in fiscal 2026.
I'd like to extend my personal thanks to our entire team for their dedication and their relentless execution both delivering the quarter and in an evolving environment including a natural disaster and positioning us to exit the year with strong performance and line of sight to a solid growth in fiscal 2026.
Given long-term megatrends, I could not be more excited about Columbus McKinnon's future. With customers dealing with scarcity of labor issues the need to improve productivity and ensuring continuous uptime, we believe there is no one better positioned to help them automate and streamline their material handling needs with our intelligent motion solutions with a unique mix of proprietary technology.
As companies embrace AI to optimize efficiency and productivity in their facilities we are positioning ourselves to be the connective tissue that links the digital and physical worlds by precisely positioning materials to enable fully automated intralogistics. Additionally, as interest rates decline and we move past the election cycle there are many economists that are calling for a potential release of pent-up investment demand.
While we remain focused on execution of our strategy today, we're simultaneously positioning ourselves to take advantage of opportunities that arise as technology evolves and we see favorable windows in the macroeconomic landscape.
This coupled with an encouraging pipeline of opportunities and the large multi-order projects we've been specified for give us confidence in a strong exit to the year and beyond.
Thanks for investing your time with us today. As always please reach out to Kristy if you have further questions.
Operator
Ladies and gentlemen, that concludes today's call. Thank you all for joining and you may now disconnect.
