CMCO

CMCO's headline FY2026 revenue growth of +23.9% to $1.19B is almost entirely inorganic: the 10-K discloses the February 3, 2026 acquisition of Kito Crosby for $2,811,907,000, consolidated for barely two months of the fiscal year. Strip the deal and the underlying business is soft — FY2025 revenue actually declined to $963M and net income already slipped to -$5.14M before the acquisition. What the deal unambiguously did do is transform the balance sheet: total assets ballooned +175% to $4.78B, total liabilities +289% to $3.34B, and long-term debt exploded +442% to $2.22B (plus $166M current). Against that ~$2.4B debt load, the market values the equity at just $391M — this is no longer an industrial-quality compounder but a highly-levered turnaround call option.

The income statement and cash flow confirm the stress rather than a clean 'one-time' charge. Operating income swung to -$119M (-10.0% margin), net income to -$230M (-$7.40 diluted EPS), and — most importantly because it is cash — operating cash flow flipped to -$146M against only $96.6M of cash on hand. Depreciation & amortization jumped +59.9% to $77M as purchase accounting and a heavier interest burden take hold. A company burning cash operationally with thin liquidity and $166M of debt due within a year is dependent on its lenders and on integration going right; management leans on 'strong free cash flow' and its CMBS operating system in the MD&A, but the FY2026 numbers directly contradict the free-cash-flow claim.