Q2 2025 Columbus McKinnon Corp Earnings Call
Good morning, and welcome to Columbus, Mckinnon second quarter fiscal 2025 earnings conference call.
Speaker Change: My name is there and that will be a conference operator today.
Speaker Change: As a reminder, this call is being recorded.
Speaker Change: I would now like to turn the conference over to Chris Moser.
Speaker Change: Vice President of Investor Relations and Treasurer.
Speaker Change: Okay.
Chris Moser: Thank you and welcome to Columbus, Mckinnon second quarter fiscal 2025 earnings conference call.
Chris Moser: The earnings release and presentation to supplement today's call are available for download on our Investor Relations website at investors. That's C. M C O dot com.
On the call with me today are David Wilson, our President and Chief Executive Officer.
Chris Moser: Greg Rush to it our chief Financial Officer.
Chris Moser: In a moment, David and Greg will walk you through our financial and operating performance for the quarter.
Chris Moser: Before we begin our remarks. Please let me remind you that we have our safe Harbor statement on slide two.
Chris Moser: During the course of this call management May make forward looking statements in regards to our current plans beliefs and expectations.
Chris Moser: 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.
Chris Moser: I'd also like to remind you that management will refer to certain non-GAAP financial measures.
Chris Moser: 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.
Chris Moser: Please see our earnings release, and our filings with the Securities and Exchange Commission for more information.
Chris Moser: Today's prepared remarks will be followed by a question and answer session.
Chris Moser: We respectfully ask that you limit yourself to one question and one follow up with that I'll turn the call over to David.
David: Thank you Christy and good morning, everyone.
David: Before we begin I know, we've all been attentive to the impact that Hurricanes Helane and Milton have had on communities across the southeast region of the United States.
David: Given C. M C. I was footprint across this region. This is particularly close to home for us.
David: 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.
David: 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.
David: In some areas there remains a long road to recovery ahead.
David: And we will continue to partner with our teams to assist with the recovery efforts that are underway.
Speaker Change: Now shifting to the quarter in Q2 orders increased 16% year over year with a book to Bill ratio of 1.0 wait.
Speaker Change: As we continue to gain traction with our commercial vertical market and customer experience initiatives.
Speaker Change: As expected sales were down year over year, driven by our linear motion factory moved to Monterrey, Mexico, the phasing of automation project backlog and the timing of EMEA project revenue.
Speaker Change: In addition at the end of Q2, the impact of Hurricane Helane 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.
Speaker Change: Profitability in the quarter was impacted by a few unique items that we previously discussed including a $23 million noncash pension settlement.
Speaker Change: <unk> million dollars of costs related to the closure of our linear motion facility 7 million of which were noncash and $4 million of startup costs related to the move of production to Monterrey, Mexico.
Speaker Change: Given these impacts and mix dynamics margins were lower than the record levels realized in the prior year.
Speaker Change: Partially offset by cost management initiatives.
Speaker Change: On an adjusted basis, we delivered 70 cents of earnings per share in line with expectations and including impacts from Hurricane claims.
Speaker Change: In the quarter. We also began to leverage our share repurchase program and completed $5 million of repurchases in September.
Speaker Change: This month, we completed another $5 million of repurchases under our <unk> five one plan.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: Particular strength in precision conveyance, which was up 42%.
Speaker Change: While mantra Tech led this growth given our recent project business wins, all precision conveyance platforms were upgraded and 20% year over year.
Speaker Change: Yeah.
Speaker Change: As we discussed last quarter, we've become the supplier of choice for power at COSE battery production Giga factories in Valencia, Spain, Saint Thomas, Canada, and solves get or Germany for intra logistics technology within their battery manufacturing processes.
Speaker Change: We received our first 9 million dollar order in Q1.
Speaker Change: Second 9 million dollar order in Q2 and two additional orders are in the pipeline for Q3, which are likely to exceed $10 million.
Speaker Change: We continue to see a long runway for future business as we support the execution of their plans.
Speaker Change: Automation, which was softer entering the year saw strong order increases with 24% order growth year over year.
Speaker Change: Overall order growth was driven by our project business.
Speaker Change: Short cycle orders remained stable. Despite what has been a dynamic macro environment, where destocking pressures uncertainty and delays in decision making persist.
Speaker Change: This performance illustrates the power of our strategy.
Speaker Change: <unk> of our commercial initiatives in the early stages of customer experience improvements that are tied to operational initiatives and our leading to market share green shoots.
Speaker Change: Overall, the project funnel remains healthy, reflecting our customer centric focus targeted end market growth initiatives channel diversification efforts and recent new customer engagements.
Speaker Change: 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.
Speaker Change: Order rates are encouraging as we enter Q3 as well, including the first.
Speaker Change: Multi order project with a large existing e-commerce customer.
Speaker Change: Backlog increased 8% sequentially in line with prior year levels, primarily driven by the strength of our order book.
Speaker Change: Short term backlog is elevated given impacts related to hurricane Helane in our linear motion plant consolidation in Monterrey, Mexico.
Driven by project timing, the phasing of our fiscal year 'twenty five shippable project backlog is weighted towards Q4 and supports our full year guidance.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: Within core markets improved customer experience commercial initiatives and differentiated offerings are enabling growth.
In Q2, we launched our new battery powered hoist and partnership with Milwaukee tool offering a first of its kind mobile one ton hoist that leverages standard battery technology.
Speaker Change: 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.
Speaker Change: Our second half forecast as Q4 weighted given the phasing of our backlog and we are well positioned for fiscal year 'twenty six given the traction we are gaining with key initiatives.
Speaker Change: Given the longer term project mix increase in our backlog, we are modestly reducing our fiscal year 'twenty five guidance to reflect a shift in delivery to fiscal 'twenty six.
Speaker Change: 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.
Greg Rush: Thank you David good morning, everyone.
Greg Rush: We delivered second quarter net sales of $242 3 million in line with the guidance, we gave even with the impact of hurricane to lean on our factories in the South east at the end of the month, which impacted revenue by about $3 million to $4 million.
Greg Rush: <unk> were down 6% year over year, primarily driven by the volume impacts of hurricane to lean the move of our linear motion factory to Monterrey, Mexico, and the timing of project backlog globally.
Greg Rush: U S sales were down 9% given that most of the unique items in the quarter were in the U S. 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 advanced 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.
Greg Rush: 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.
Greg Rush: This includes $6 8 million of noncash asset impairment charges the.
Greg Rush: The remainder of the decline was due to lower sales volume and mix.
Greg Rush: On a GAAP basis, our gross margin was 39% 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 monster attack.
Greg Rush: Lower sales in the U S 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.
Greg Rush: 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.
Greg Rush: This was driven primarily by cost management actions and lower incentive based compensation.
Greg Rush: As a result, we generated operating income of $10 8 million in the quarter on a GAAP basis.
Greg Rush: And adjusted operating income of $27 million.
Adjusted operating margin was 11, 1% in the quarter.
Greg Rush: We recorded a GAAP loss per diluted share for the quarter of 52.
Greg Rush: Which includes a noncash pension settlement charge for the termination of one of our U S pension plans when tax affected this charge affected net income by $17 5 million or <unk> 61 per share EPS was also impacted by $11 $8 million of factory simplification and startup expenses also.
Greg Rush: <unk> affected at a 24, 6% tax rate would.
Greg Rush: Adjusted earnings per diluted share of <unk> 70 was in line with our guidance adjusting for a <unk> <unk> per share impact from Hurricane Helene.
Greg Rush: Our adjusted EBITDA was $39 2 million in the second quarter with an adjusted EBITA margin of 16, 2%.
Greg Rush: 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.
Greg Rush: 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 noncash pension settlement and asset impairment charges on our net income.
Greg Rush: 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.
Greg Rush: We expect interest expense to decline by $6 million in fiscal year 'twenty five versus fiscal year 'twenty four 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.
Greg Rush: Our net leverage ratio was two seven times and our financial covenant basis in line with the prior year.
Greg Rush: We now expect our net leverage ratio to decline to two three times by the end of fiscal year 'twenty. Five 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.
Greg Rush: Let me wrap up with our updated guidance for fiscal year 'twenty five in the third quarter, which reflects the current macroeconomic environment and the timing of our project backlog.
Greg Rush: In the third quarter, we expect sales growth in adjusted EPS to be flat to the prior year.
Greg Rush: For the full year, we are updating our fiscal 2025 guidance the flat to low single digit sales growth year over year.
Greg Rush: 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 'twenty five at approximately two three times.
Greg Rush: We remain confident in the health of our business and our ability to achieve our long term objectives.
Greg Rush: Operator, we're now ready to take questions.
Speaker Change: We will now begin the question and answer session.
Speaker Change: Wanted to ask a question.
Speaker Change: <unk> followed by the number one on your telephone keypad.
Speaker Change: Our first question comes from the line of Don <unk>.
Speaker Change: From C. G C J S securities.
Speaker Change: Please go ahead.
Speaker Change: Hi, Good morning, it's actually Charlie Strausser for John just a couple of quick questions if I could.
Speaker Change: Any chance, we can get a little more quantification of the impact of the Hurricanes in Q2.
Speaker Change: Are there any.
Speaker Change: Hey, Greg issues heading into Q3.
Speaker Change: Yes, sure did you say Charlie I couldn't quite hear the name when you.
Greg Rush: Yes, Charlie it's rather I'm, sorry, Okay, Hi, Hi, Charlie good morning.
Greg Rush: So yeah the hurricane.
It resulted in the closure of a Damascus, Virginia facility for about five days.
Greg Rush: And disrupt wrapped in several other facilities in the south east that we operate and while we incurred no property damage sales shifted into the first week of October.
Greg Rush: And while it's difficult to gauge the exact impact across our full for 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 four.
Greg Rush: $2 million worth of disruption associated with the hurricane.
Greg Rush: And Ah the E P S impact of that $4 million of sales would've been about three cents a share.
Speaker Change: Great. That's helpful. Thank you and just a follow ups that could industrial and especially German end markets are.
So the week weakening where are you seeing kind of offsetting strength.
Speaker Change: Mhm.
Yeah. So the that's true German markets are soft.
Speaker Change: 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 to generate opportunities for the business with our our total portfolio and I think the team there continues to do a nice job in that environment. We.
Speaker Change: Seem 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.
Speaker Change: The markets across the World, we see defense and AG as being strong.
Speaker Change: We also see aerospace remaining strong with further potential and the utility markets in the U S have seen an uptick with recent hurricane activities.
Speaker Change: Great. Thank you.
Speaker Change: You're welcome.
Speaker Change: Our next question comes from the line of Matt Summerville with D. A Davidson.
Speaker Change: Please go ahead.
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 topline as it related to the manufacturing relocation of Mexico. The <unk>.
Matt Summerville: I mean, 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 'twenty six I just want to make sure I'm clear on that and then I have a follow up.
Speaker Change: Sure Yeah. 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 it is expected to ship in Q3.
Speaker Change: This is roughly in line with the expectations, we had as we entered the quarter and communicated in our Q1 results.
Speaker Change: I think the team did a nice job of executing throughout the transition we.
Speaker Change: We shipped our last order out of Charlotte in August and all production from then Ford 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.
Speaker Change: And they're focused specifically on more mechanical actuation in 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'll be more or less in line with where previous production levels had been but that $4 million is what moved out of the call.
Speaker Change: Order associated with the the.
Speaker Change: The linear motion move and then more broadly we saw.
Speaker Change: If you recall in our Q1 call, we talked about automation orders being down in Q1 and that led to less backlog to to ship in this quarter and so automation.
Speaker Change: Impacted the the the shift by about $5 million, let's say.
Speaker Change: Precision can vance was about $3 million.
Speaker Change: And linear motion more broadly in Europe was about $3 million.
Got it and.
Speaker Change: You mentioned power co earlier it sounds like you got nine in Q1. Another 90 in Q2. Another 10 in Q3, what ultimately as you look over the next two to three years, what could that aggregate opportunity. All commensurately look like for you guys between those three factories in terms of orders and therefore ultimate.
Speaker Change: Lee revenue, yes, if things sort of break your way if you will.
Speaker Change: Right right.
Speaker Change: 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.
Speaker Change: And there's a whole lot of additional customer activity as you think about this market specifically in the opportunity for us given our application specific and advantaged <unk>.
Speaker Change: Process technology to support that manufacturing process.
Speaker Change: Got it thank you guys.
Speaker Change: Thanks, Matt.
Speaker Change: Yeah.
Speaker Change: Our next question comes from the line of Steve <unk>.
Speaker Change: Danny with Sidoti.
Speaker Change: Please go ahead.
Speaker Change: Good morning, David Good morning, Greg I appreciate the detail on the call.
Speaker Change: I wanted to ask about the <unk> 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.
Speaker Change: Given that that additional revenue and I know <unk> is your seasonally slowest cause.
Speaker Change: Is there any.
Speaker Change: Negatives in <unk>, because I would've expected your <unk> guide to be a little bit better given the amount of.
Speaker Change:
Speaker Change: Revenue that pushed into that quarter.
Speaker Change: Yeah, Steve exactly and you know certainly anticipated this question and understand 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 <unk>.
Speaker Change: Backlog is now more heavily weighted towards project activity that simply phases in the backlog into Q4, and then into Q2 'twenty 'twenty six fiscal 2026, and so our short cycle business has been stable.
Speaker Change: 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 and manage.
Speaker Change: That in a more precise way and so those actions along with.
Speaker Change: The background of economic 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 the activity phases in the backlog the project business that is.
Steve I'll add one other point on the linear motion production in Monterrey. So we will ship that 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 of roughly 50 in Q2, so they'll get to a full run rate, but we don't anticipate.
Speaker Change: There'll be able to maintain above what our full run rate is to catch up right right revenue. So a full run rate plus that not going to be achievable in this quarter.
Speaker Change: So some of that 4 million could push into Q4.
Speaker Change: Not that specific 4 million, but right right right.
Speaker Change: The aggregate right now it just means the other stuff would push out.
Speaker Change: Correct correct correct.
Speaker Change: I wanted to ask about the gross margin I know that obviously there was a lot of noise, which are covered in the quarter.
Speaker Change: And you talked about mix, but when you look at what's in backlog now can 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 Youre seeing in backlog right now and the pricing of it.
Speaker Change: Yeah of course, we certainly are focused on our longer term objectives, we have as a business to get to that plus or minus 40% in gross margin.
Speaker Change: 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.
Speaker Change: And some of the higher margin portions of the 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.
Speaker Change: And the mix shift really led to that margin outcome in the quarter than 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.
Speaker Change: 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.
Speaker Change: Deliver improvements that take us to that targeted level overtime.
Speaker Change: Great. Thanks, David Thanks, Greg.
Steve: Thanks, Steve.
Speaker Change: Our next question comes from the line of.
Speaker Change: Oh.
Speaker Change: Yes Seaport research.
Speaker Change: Please go ahead.
Speaker Change: Hey, Thanks, good morning, everyone.
Speaker Change: Thanks for the detail about the you know the.
Speaker Change: Alright ramp and things like that I Wonder if you could just help us understand.
Speaker Change: A little bit about you know we've done a lot maybe just review what we've done so far in Monterrey.
Speaker Change: And you know what's the next step is it do we have something left to do in 2025.
Speaker Change: Or is it now we look to 2026 for the next phase.
Speaker Change: Okay.
Speaker Change: Yeah, so well so what we've done to date is in back in January we announced that we had the new facility up in Monterrey. So it's been in the planning phase.
Speaker Change: And early execution phase really sense you know.
Speaker Change: Before June of 2022, so it's been a while because it's a very complex.
Speaker Change:
Speaker Change: A project that we've got.
Speaker Change: And so to date, we started in the January timeframe and consolidated a small lifting facility that we already had in Mexico.
Speaker Change: 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 consolidate.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: Okay great.
Speaker Change: And then just switching gears over to the.
Speaker Change: The short cycle business.
Speaker Change: You characterized it as stable I'm wondering if you could provide a little bit more detail.
Speaker Change: Stable across the board and the geographic regions.
Speaker Change: And you know where I guess you know.
Speaker Change: Mostly focused on U S. But did you see anything getting a little bit better some of our industrial companies are starting to see some some improvement here just kind of in the recent months.
Speaker Change: In the U S.
Speaker Change: Yeah, 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.
Speaker Change: And more consolidated channel partners and I would say that that was a true primarily in the United States and then in Europe, where we have a a lifting distribution portion of our business. There's been some pressure there on order rates for that portion of our short cycle business.
Speaker Change: Okay, Yeah, Okay, and then and through the first few weeks of October, though I would say that you know 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 Q4, Q3, yeah, and while it's just add Oh, what are they typically in our fiscal third quarter ended in December as we do see the channel manage inventory levels as they typically do you know what there 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.
Speaker Change: That's a typical phenomena, we would see and also <unk>.
Speaker Change: Certainly with the election uncertainty I think theres been a little bit of.
Speaker Change: Hmm.
Speaker Change: Reluctance from.
Speaker Change: From a channel perspective to add inventory, but we think you know once that uncertainty clears up then we should see.
Speaker Change: A rebound again.
Speaker Change: Okay great.
Speaker Change: And then I think in the prepared remarks excuse me.
Speaker Change: You guys talked about e-commerce.
Speaker Change: And you know I wonder if you could provide some more detail about you've got a a new ecommerce count customer or an existing one that.
Speaker Change: Like it's ramping can you talk about that and you know what the final might look like around precision conveyance ecommerce.
Speaker Change: Sure absolutely and so we're really excited about developments in that particular vertical market.
Speaker Change: We have both existing and new customers that are expanding.
Speaker Change: You know expanding their activity in the space and so we see quotations and order activity up in that in that particular vertical market.
Speaker Change: Early in this quarter, we just mentioned in the prepared remarks, we took on the order of multi.
Speaker Change: Multi order.
Speaker Change: Opportunity are related to sorting processes for existing warehouses within an existing customer environment that translates across the entire footprint of their their investment for warehousing space and so.
Speaker Change: Really good opportunities that we're excited about being a selected for and that will deliver over the next couple of quarters.
Speaker Change: And it's the beginning of what we think is gonna be a nice run of new investment across that space with existing and new customers for the company.
Speaker Change: Yeah, and just to reiterate what Dave said on the call Walt as you know we saw outstanding order growth in precision conveyance up 42% year over year in 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.
Speaker Change: Yes.
Speaker Change: Okay, Great and then it sounds like some of those E Commerce orders Ive, just gotten first phases of what should be you know much larger funnels. It the way we should read it.
Speaker Change: Yes.
Speaker Change: Okay. Okay, great. Thank you.
Speaker Change: Our final question comes from Duane James Jeremy.
Speaker Change: With J P. Morgan.
Speaker Change: Please go ahead hey, good.
Speaker Change: Morning, guys. Thanks for the question here.
Speaker Change: Hmm.
Speaker Change: 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 are there other moving parts.
Speaker Change: You know in the back of the year back half of the year to consider there.
Speaker Change: No. It was 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.
Speaker Change: And then we had the move to Monterrey incorporated and so those were the two big drivers outside of the Hurricane impact.
Speaker Change: Okay. That's helpful. Thanks, and then my second question.
Speaker Change: Yeah, just a mantra attack I know, it's kind of grouped into your your other bet 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 way to think about it and I guess and I believe you were asked this last quarter.
But is that really a do you think that's because of the integration across the portfolio or are there other macro factors there are impacting that.
Speaker Change: Yeah, and when we think about the precision conveyance platform within the company. We really think about just is that it's a combination of select technologies that are market, leading in their own right, whether it's belted precision conveyance flexible conveyance.
Speaker Change: Accumulation technology or a synchronous conveyance with the mantra Tech acquisition, and we're offering a comprehensive solution that becomes advantage because of the combination of those technologies and in many cases.
Speaker Change: For certain applications and so yes, our mantra tech 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 mantra tech specifically that asynchronous conveyance the foot.
Speaker Change: Print that at its advantaged with it's a smaller footprint product, it's highly efficient from an energy consumption perspective.
Speaker Change: It's precise its fast it has a heavy payload and it's something that is gaining traction in multiple markets, but most notably.
Speaker Change: Hum.
Speaker Change: M B, a battery production space and the combination of the teams.
Speaker Change: 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.
Speaker Change: 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 represented more broadly is helping too.
Speaker Change: And James Webb did what we said when we bought our mantra Tac was that we expect it to double revenue and a three year period of time from roughly 30 million to $60 million and so we think right traffic.
Speaker Change: Okay.
Speaker Change: Okay, no that sounds good I appreciate the color guys. Thanks.
Speaker Change: You bet. Thank you.
Speaker Change: Our last question comes from the line of Steve Arizona.
Speaker Change: Sorry.
Speaker Change: Please go ahead.
Steve Arizona: Hey, Thanks, guys just had a quick follow up on capital allocation you did highlight some modest share repurchases in in <unk> and not already in three Q given the second half of the year is typically stronger for FERC for cash flow generation easily covers those 30 million you've got it front get repayments any thoughts on.
Steve Arizona: On.
Steve Arizona: Becoming more aggressive repurchase or I know, that's a board decision, but if you could comment on that.
Speaker Change: Yeah, So we see it as a inappropriate how tool in our toolbox on capital allocation you know certainly with interest rates falling now we model the impact of share repurchases versus debt pay down we and you know with falling rates and with where the stock price has been we feel that it's an excellent opportunity.
Speaker Change: 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.
Speaker Change: Okay. Thanks, Greg.
Steve Arizona: Thanks, Steve.
Steve Arizona: Okay.
Speaker Change: This concludes the question and answer session.
Speaker Change: I will now turn the call back over to Mr. Wilson Wilson for closing remarks.
Wilson Wilson: Please go ahead.
Wilson 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.
Wilson Wilson: We delivered on our guidance in the second quarter adjusted for the impact of Helane.
Wilson Wilson: 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 'twenty six.
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 in line of sight to our solid growth in fiscal 'twenty 'twenty.
Wilson Wilson: Six.
Wilson Wilson: Given long term megatrends I could not be more excited about Columbus Mckinnon future.
Wilson Wilson: 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.
Wilson Wilson: 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 intra logistics.
Wilson Wilson: 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.
Wilson Wilson: 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 manufacture the macroeconomic landscape.
Wilson Wilson: This coupled with an encouraging pipeline of opportunities in the large multi year order projects, we've been specified for give us confidence in our strong exit to the year and beyond.
Wilson Wilson: Thanks for investing your time with US today as always please reach out to Christie. If you have further questions.
Ladies and gentlemen that concludes today's call. Thank you all for joining and you may now disconnect.
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