{"url_path":"/sec/cmco/10-q/2026/item-1a","section_key":"item-1a","section_title":"Item 1A Risk Factors.","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-02-09","source_url":"https://www.sec.gov/Archives/edgar/data/1005229/0001005229-26-000011-index.html","accession_number":"0001005229-26-000011","cik":"0001005229","ticker":"CMCO","issuer_name":"COLUMBUS MCKINNON CORP","edgar_url":"https://www.sec.gov/Archives/edgar/data/1005229/0001005229-26-000011-index.html","primary_entity_key":"0001005229","primary_entity_name":"COLUMBUS MCKINNON CORP"},"word_count":2088,"has_tables":true,"body_markdown":"Item 1A.     Risk Factors.\n\nThere have been no material changes from the risk factors as previously disclosed in the 2025 Form 10-K except as set forth below. The risks and uncertainties described in our 2025 Form 10-K and below are those that we have identified as material, but are not the only risks or uncertainties facing Columbus McKinnon. This list in our 2025 Form 10-K and below are not all-inclusive, and our business could also be materially adversely affected by additional risks that are not presently known to us or that we currently consider to be immaterial. As a result, the trading price of our common stock could decline, and you could lose all or part of your investment in our common stock.\n\nWe have recorded goodwill and other intangible assets in connection with our prior acquisitions. Goodwill and other acquired intangible assets could become impaired and adversely affect our future operating results.\n\nWe have accounted for business acquisitions, including our prior acquisitions of montratec, Dorner Mfg. Corp and Garvey Corporation, which are each part of our Precision Conveyance reporting unit, as business combinations under the acquisition method of accounting in accordance with U.S. generally accepted accounting principles. Under the acquisition method of accounting, the total purchase price is allocated to net tangible assets and identifiable intangible assets of acquired businesses based on their fair values as of the date of completion of the acquisition. The excess of the purchase price over those fair values is recorded as goodwill.\n\nTo the extent the value of goodwill or other intangible assets becomes impaired, we may be required to incur charges and such charges may be material. We conduct our goodwill and indefinite-lived intangible asset impairment analysis annually, or more frequently if we believe indicators of impairment exist. As part of our annual goodwill impairment analysis with respect to our Precision Conveyance reporting unit, we performed a qualitative assessment as of February 28, 2025, and, based upon the results of this qualitative assessment, we determined that a quantitative test was required to be performed as the businesses in this reporting unit were recently acquired resulting in a relatively small difference between the Precision Conveyance reporting unit’s book and fair value. The quantitative test results indicated that the goodwill of the Precision Conveyance reporting unit was not impaired at the time of that test as its fair value exceeded its book value by 2.6%. While the goodwill of the Precision Conveyance reporting unit was not determined to be impaired at that time, it may be at risk of future impairment, in which charges may be material, if the related business does not perform as projected, or if market assumptions utilized in the impairment analysis deteriorate, including an unfavorable change in the discount rate. Refer to Note 7 in the accompanying condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information regarding our goodwill and intangible assets.\n\nAny such impairment charges relating to goodwill or other intangible assets could have a material impact on our operating results in future periods, and the announcement of a material impairment could have an adverse impact on the trading price of the shares of our common stock.\n\nWe may fail to realize all of the anticipated benefits of the Kito Crosby Acquisition or those benefits may take longer to realize than expected.\n\nWe expect to devote significant management attention to integrating the business practices and operations of Kito Crosby with Columbus McKinnon. In connection with the closing of the Kito Crosby Acquisition, we may experience disruptions to our business and, if integrated ineffectively, such disruptions could restrict the realization of the full expected benefits of the Kito Crosby Acquisition. The failure to meet the challenges involved in the integration process and to realize the anticipated benefits of the Kito Crosby Acquisition could cause an interruption or loss of momentum in our operations. Difficulties in integrating Kito Crosby into our business may include rationalizing the operations, processes and systems of the acquired business, retaining and motivating key management and employees, and integrating existing business relationships with suppliers and customers. Even if integration of Kito Crosby is successful, the financial and operational results may differ materially from our assumptions and forecasts due to unforeseen expenses, delays, conditions and liabilities. In addition, we may incur unanticipated costs or expenses following the Kito Crosby Acquisition, including post-closing asset impairment charges, expenses associated with eliminating duplicate facilities, and other liabilities. Furthermore, the closing of the Kito Crosby Acquisition and the subsequent integration of Kito Crosby into our business may result in material unanticipated problems, expenses, charges, liabilities, competitive responses, loss of customers and other business relationships, and diversion of management’s attention. Additional integration challenges may include difficulty in achieving anticipated cost savings, synergies, business opportunities, growth prospects and other benefits from the Kito Crosby Acquisition; difficulties in the\n\n40\n\nintegration of operations and systems, including pricing and marketing strategies; and difficulties in conforming standards, controls, procedures, financial reporting and accounting and other policies, business cultures and compensation structures. Many of these factors will be outside of our control and any one of them could result in increased costs, including restructuring charges, decreases in revenues and diversion of management’s time and energy, which could adversely affect our business, financial condition and results of operations. Additionally, achieving the anticipated benefits, including synergies and cost savings, is subject to a number of uncertainties, including whether the business acquired can be operated in the manner we intend and whether our costs to finance the Kito Crosby Acquisition will be consistent with our expectations. Thus, the integration of Kito Crosby may be unpredictable, subject to delays or changed circumstances, and we can give no assurance that the acquired business will perform in accordance with our expectations or that our expectations with respect to integration, synergies or cost savings as a result of the Kito Crosby Acquisition will materialize. In addition, our anticipated costs to achieve the integration of Kito Crosby may differ significantly from our current estimates. The integration may place an additional burden on our management and internal resources, and the diversion of management’s attention during the integration process could have an adverse effect on our business, financial condition and expected operating results.\n\nKito Crosby’s business may underperform relative to our expectations.\n\nWe may not be able to maintain the levels of revenue, earnings or operating efficiency that Kito Crosby and we have achieved or might achieve separately. The business and financial performance of Kito Crosby are subject to certain risks and uncertainties, including the risk of the loss of, or changes to, its relationships with its customers. We may be unable to achieve the same growth, revenues and profitability that Kito Crosby has achieved in the past.\n\nThe Divestiture is subject to various risks, uncertainties and conditions and may not be completed on the terms or timeline currently contemplated, if at all.\n\nOn January 13, 2026, we entered into the Divestiture Agreement to sell the Divestiture Business. The Divestiture Agreement provides that completion of the Divestiture is subject to the satisfaction or waiver of customary closing conditions. There can be no assurance regarding the timing of the completion of the Divestiture or that the transaction will be completed. Unanticipated developments could delay, prevent or otherwise adversely affect the Divestiture, including, but not limited to, potential issues or delays in obtaining various third party consents or approvals. In addition, each party has the right to terminate the Divestiture Agreement relating to the Divestiture under specified circumstances, including if the closing of the transaction has not occurred on or before April 30, 2026.\n\nRisks Related Our Indebtedness\n\nWe have substantial indebtedness following the consummation of the Kito Crosby Acquisition, which could adversely affect our financial health, limit our ability to raise additional capital or obtain financing in the future and prevent us from making payments on our outstanding indebtedness.\n\nWe have substantial indebtedness following the consummation of the Kito Acquisition and the related financing transactions. Our substantial indebtedness may have important consequences for us. For example, it may: make it more difficult for us to make payments on our indebtedness; increase our vulnerability to general economic and industry conditions, including recessions and periods of significant inflation and financial market volatility; expose us to the risk of increased interest rates because any borrowings we make under certain of our indebtedness will bear interest at variable rates; require us to use a substantial portion of our cash flows from operations to service our indebtedness, thereby reducing our ability to fund working capital, capital expenditures and other expenses; limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; increase our cost of future borrowing; place us at a competitive disadvantage compared to competitors that have less indebtedness or comparable debt at more favorable interest rates; limit our ability to incur additional indebtedness to finance future acquisitions; limit our ability to refinance indebtedness and increase the associated costs of our indebtedness; and limit our ability to borrow additional funds that may be needed to operate and expand our business. The agreements governing our indebtedness contain restrictive covenants that limit our ability to engage in activities that may be in our long-term best interests. Those covenants include restrictions, among others, on our ability to incur more indebtedness or issue certain preferred shares, pay dividends, redeem stock or make other distributions in respect of capital stock, repurchase, prepay or redeem subordinated indebtedness, make investments, create restrictions on the ability of our restricted subsidiaries to pay dividends to us or make other intercompany transfers, create liens, transfer or sell assets, consolidate, merge, sell or otherwise dispose of all or substantially all of our assets, enter into certain transactions with our affiliates and designate any subsidiary as an unrestricted subsidiary. Our failure to comply with those covenants could result in an event of default, which, if not cured or waived, could result in the acceleration of all of our indebtedness.\n\nDespite our indebtedness levels, we and our subsidiaries may be able to incur substantially more indebtedness, including secured debt, which may increase the risks to our financial condition and results of operations created by our substantial indebtedness.\n\n41\n\nThe terms of the agreements governing our indebtedness do provide us and our subsidiaries with the flexibility to incur a substantial amount of indebtedness in the future, which indebtedness may be secured or unsecured. In particular, if we or our subsidiaries are in compliance with certain incurrence ratios, we and our subsidiaries may be able to incur substantial additional indebtedness. Any such incurrence of additional indebtedness may increase the risks created by our current substantial indebtedness. These restrictions also will not prevent us from incurring obligations that do not constitute indebtedness.\n\nThe agreements governing our indebtedness contain restrictive covenants that restrict our ability and the ability of most of our subsidiaries to engage in certain business and financial transactions, and, as a result, may adversely affect our business, financial condition, results of operations and cash flows.\n\nThe agreements governing our indebtedness contain restrictive covenants that, among other things, limit our ability and the ability of our restricted subsidiaries to (as applicable): incur additional indebtedness or issue certain preferred shares; pay dividends, redeem stock or make other distributions in respect of capital stock; repurchase, prepay or redeem the Notes and subordinated indebtedness; make investments; create liens and incur additional liens; transfer or sell assets; create restrictions on the ability of our restricted subsidiaries to pay dividends to us or make other intercompany transfers; consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; change the nature of our business; enter into certain transactions with our affiliates; and designate any subsidiaries as an unrestricted subsidiary. The agreements governing our indebtedness contain certain leverage ratios and our ability to meet those ratios may be affected by events beyond our control, and we may be unable to meet them. We are required, and we expect, to make mandatory prepayments under the agreements governing our indebtedness upon the occurrence of certain events, including the sale of certain assets and the issuance of debt, in each case subject to certain limitations and conditions set forth in such agreements. In addition, the AR Securitization Facility contains a number of covenants that, among other things, limit or restrict the applicable borrowers with respect to liens, indebtedness, guarantees, mergers, dispositions of substantially all assets, dividends, redemption of stock, investments, corporate matters and changes in business conducted."}