CMCO revenue doubles on Kito Crosby close, but operating income swings negative on debt costs

Filed July 30, 2026 · Period ending June 30, 2026 · Compared to 10-Q Jul 30, 2025 · ~2 min read

Key Changes

• high

  Kito Crosby acquisition closed Feb 2026 for $2.8B, driving revenue up 125% to $531.5M but swinging operating income from $5.5M profit to $17.7M loss as $55M inventory step-up amortization compressed gross margin 520bp to 27.5%.

  MD&A: Kito Crosby acquisition verify on EDGAR →
• high

  Interest expense surged to $47.6M from $8.7M (up $38.9M) on debt incurred to finance the acquisition, representing a new fixed cost that will persist until the company deleverages.

  MD&A: Interest expense verify on EDGAR →
• high

  Company established deferred tax asset valuation allowance for interest expense carryforwards, increasing effective tax rate by 40-50 percentage points for fiscal 2027 as three-year cumulative loss position prevents recognition of tax benefits.

  Notes: Tax rate guidance view on EDGAR →