Company Announcement - Enerpac Tool Group Corp. will release its fourth quarter fiscal 2025 earnings after the market closes on October 15, 2025 [1] - A conference call to discuss the results is scheduled for October 16, 2025, at 8:30 a.m. ET / 7:30 a.m. CT [1] Conference Call Details - A real-time webcast of the conference call will be available in the Investors section of the Company's website [2] - A replay of the call will be accessible for 90 days for those unable to listen live [2] Company Overview - Enerpac Tool Group Corp. is a leading provider of industrial tools, services, technology, and solutions for mission-critical applications in over 100 countries [3] - The Company specializes in high pressure hydraulic tools, controlled force products, and solutions for precise positioning of heavy loads [3] - Founded in 1910 and headquartered in Milwaukee, Wisconsin, Enerpac Tool Group's common stock trades on the NYSE under the symbol EPAC [3]

Group 1 - Enerpac Tool Group's shares declined by 5.9% on June 27th despite a broader market increase [1] - The decline followed the company's financial report, indicating potential concerns among investors [1] Group 2 - Crude Value Insights provides an investing service focused on oil and natural gas, emphasizing cash flow and growth prospects [1] - The service includes a stock model account and in-depth cash flow analyses of exploration and production firms [2]

[Part I—Financial Information](index=5&type=section&id=Part%20I%E2%80%94Financial%20Information) [Item 1—Condensed Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Item%201%E2%80%94Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited condensed consolidated financial statements for the three and nine months ended May 31, 2025, and 2024, including statements of earnings, comprehensive income, balance sheets, and cash flows, along with detailed notes on acquisitions, restructuring, and segment performance [Condensed Consolidated Statements of Earnings](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings) For Q3 FY2025, net sales increased to $158.7 million, while operating profit slightly decreased to $31.7 million due to higher restructuring charges; for the nine-month period, net sales grew to $449.4 million, and operating profit increased to $93.6 million, with diluted EPS from continuing operations at $0.41 for the quarter and $1.18 for the nine-month period Consolidated Statements of Earnings Highlights (in thousands, except per share data) | Metric | Three Months Ended May 31, 2025 | Three Months Ended May 31, 2024 | Nine Months Ended May 31, 2025 | Nine Months Ended May 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $158,661 | $150,389 | $449,385 | $430,796 | | **Gross Profit** | $79,903 | $77,883 | $227,985 | $223,608 | | **Operating Profit** | $31,681 | $33,363 | $93,633 | $91,547 | | **Net Earnings from Continuing Operations** | $22,044 | $22,621 | $64,668 | $58,798 | | **Diluted EPS from Continuing Operations** | $0.41 | $0.41 | $1.18 | $1.07 | [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income for Q3 FY2025 significantly increased to $42.6 million from $26.5 million, primarily driven by a positive foreign currency translation adjustment of $20.3 million, with the nine-month comprehensive income rising to $70.7 million from $61.2 million Comprehensive Income Summary (in thousands) | Metric | Three Months Ended May 31, 2025 | Three Months Ended May 31, 2024 | Nine Months Ended May 31, 2025 | Nine Months Ended May 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Earnings** | $22,044 | $25,778 | $64,668 | $61,333 | | **Foreign Currency Translation Adjustments** | $20,280 | $423 | $5,178 | $(2,460) | | **Comprehensive Income** | $42,561 | $26,485 | $70,682 | $61,204 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of May 31, 2025, total assets increased to $828.1 million from $777.3 million, driven by growth in goodwill, inventories, and property, plant, and equipment, while total liabilities remained stable at $389.9 million and total shareholders' equity grew to $438.2 million Balance Sheet Highlights (in thousands) | Account | May 31, 2025 | August 31, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $140,506 | $167,094 | | **Total current assets** | $382,581 | $372,258 | | **Goodwill** | $287,630 | $269,597 | | **Total assets** | $828,104 | $777,328 | | **Total current liabilities** | $132,020 | $129,393 | | **Long-term debt, net** | $184,627 | $189,503 | | **Total liabilities** | $389,879 | $385,349 | | **Total shareholders' equity** | $438,225 | $391,979 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended May 31, 2025, net cash provided by operating activities increased to $56.0 million, net cash used in investing activities rose sharply to $43.1 million due to a business acquisition, and net cash used in financing activities decreased to $40.0 million, resulting in a net decrease of $26.6 million in cash and cash equivalents Cash Flow Summary (in thousands) | Activity | Nine Months Ended May 31, 2025 | Nine Months Ended May 31, 2024 | | :--- | :--- | :--- | | **Cash provided by operating activities** | $56,030 | $36,958 | | **Cash used in investing activities** | $(43,104) | $(7,505) | | **Cash used in financing activities** | $(39,971) | $(51,404) | | **Net decrease in cash and cash equivalents** | $(26,588) | $(22,053) | | **Cash and cash equivalents - end of period** | $140,506 | $132,362 | [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, revenue recognition, acquisitions, restructuring, debt, and segment information, highlighting the DTA acquisition for $26.7 million, the completion of the ASCEND program, a new Q3 FY2025 restructuring plan with $5.9 million in charges, and the repurchase of 660,050 shares for $28.6 million - On September 4, 2024, the Company acquired DTA for an initial purchase price of **$26.7 million**, plus a potential earn-out. This acquisition added **$14.8 million** to goodwill[47](index=47&type=chunk)[48](index=48&type=chunk)[51](index=51&type=chunk) - The ASCEND transformation program was completed as of August 31, 2024, with total program costs of **$74.7 million**. No related expenses were incurred in fiscal 2025[39](index=39&type=chunk)[40](index=40&type=chunk) - During Q3 2025, the company initiated a new restructuring plan, incurring costs of **$5.9 million** related to personnel actions and charges for its former headquarters[45](index=45&type=chunk) - The company repurchased and retired **660,050 shares** for **$28.6 million** in the nine months ended May 31, 2025. **2,056,999 shares** remain available for purchase under the program[65](index=65&type=chunk) [Item 2—Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202%E2%80%94Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, business strategy, and liquidity, noting Q3 FY2025 consolidated net sales grew 6% to $159 million (2% organic growth) with a gross profit margin decline, while nine-month sales increased 4% to $449 million (2% organic growth), driven by a strategy focused on organic growth, margin expansion, and disciplined capital deployment, with improved cash flow from operations Q3 FY2025 vs Q3 FY2024 Performance (in millions) | Metric | Q3 2025 | Q3 2024 | Change | Organic Growth | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $159 | $150 | +6% | +2% | | **Gross Profit** | $80 | $78 | +2.6% | N/A | | **Operating Profit** | $32 | $33 | -6.3% | N/A | Nine Months FY2025 vs FY2024 Performance (in millions) | Metric | 9M 2025 | 9M 2024 | Change | Organic Growth | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $449 | $431 | +4% | +2% | | **Gross Profit** | $228 | $224 | +1.8% | N/A | | **Operating Profit** | $94 | $92 | +2.2% | N/A | - The IT&S segment net sales increased by **5%** in Q3 FY2025, with organic sales growth of **1%**. For the nine-month period, segment sales grew **4%**, with organic growth of **2%**[88](index=88&type=chunk)[89](index=89&type=chunk) - Net cash provided by operating activities increased to **$56 million** for the nine months ended May 31, 2025, up from **$37 million** in the prior year, driven by higher earnings and lower incentive payments[95](index=95&type=chunk) [Item 3—Quantitative and Qualitative Disclosures about Market Risk](index=25&type=section&id=Item%203%E2%80%94Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company manages exposure to interest rate, foreign currency, and commodity cost risks, using an interest-rate swap for $60 million of its term loan, and estimates a hypothetical 10% adverse change in foreign exchange rates would reduce quarterly sales by $7 million, while acknowledging vulnerability to commodity price fluctuations - **Interest Rate Risk:** An interest-rate swap effectively converts **$60 million** of variable-rate term loan debt to a fixed rate. A **10%** increase in the average cost of variable rate debt would have a minimal impact (less than **$1 million**) on quarterly financing costs[108](index=108&type=chunk) - **Foreign Currency Risk:** A hypothetical **10%** decrease in all foreign exchange rates against the U.S. dollar would have lowered quarterly sales by **$7 million** and operating profit by less than **$1 million**[110](index=110&type=chunk) - **Commodity Cost Risk:** The company is exposed to price fluctuations in commodity raw materials, such as steel and plastic resin, which could negatively impact results if price increases cannot be passed on to customers[111](index=111&type=chunk) [Item 4—Controls and Procedures](index=26&type=section&id=Item%204%E2%80%94Controls%20and%20Procedures) Senior management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of May 31, 2025, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[112](index=112&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[113](index=113&type=chunk) [Part II—Other Information](index=27&type=section&id=Part%20II%E2%80%94Other%20Information) [Item 1A—Risk Factors](index=27&type=page&id=Item%201A%E2%80%94Risk%20Factors) This section confirms no material changes to previously disclosed risk factors, reiterating key risks such as geopolitical actions (Middle East and Russia-Ukraine conflicts) and global tariff uncertainty that could deteriorate economic conditions and harm the business - The company highlights that geopolitical activities, including armed conflicts in the Middle East and the Russia-Ukraine conflict, could cause economic deterioration and harm the business[115](index=115&type=chunk) - Uncertainty over global tariffs poses a risk by potentially increasing production costs and depressing demand for the company's products[116](index=116&type=chunk) [Item 2—Unregistered Sales of Equity Securities and Use of Proceeds](index=27&type=section&id=Item%202%E2%80%94Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased and retired 660,050 shares for $28.6 million in the nine months ended May 31, 2025, including 330,523 shares in Q3, with 2,056,999 shares remaining authorized for repurchase Share Repurchase Activity (Q3 FY2025) | Period | Shares Repurchased | Average Price Paid per Share | | :--- | :--- | :--- | | March 2025 | 180,333 | $44.83 | | April 2025 | 148,113 | $38.64 | | May 2025 | 2,077 | $39.93 | | **Total Q3** | **330,523** | **$42.03** | - For the nine months ended May 31, 2025, the company repurchased and retired **660,050 shares** for **$28.6 million**[118](index=118&type=chunk) - The maximum number of shares that may yet be purchased under the program is **2,056,999**[118](index=118&type=chunk)[119](index=119&type=chunk) [Item 5—Other Information](index=27&type=section&id=Item%205%E2%80%94Other%20Information) This section discloses that three key executives, including the Non-Executive Chair, President and CEO, and Executive VP and CHRO, entered into new Rule 10b5-1 trading arrangements in May 2025 for the potential future sale of company stock - In May 2025, the Non-Executive Chair (E. James Ferland), President and CEO (Paul E. Sternlieb), and EVP and CHRO (Benjamin J. Topercer) each entered into new Rule 10b5-1 trading arrangements for the future sale of company shares[120](index=120&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk) [Item 6—Exhibits](index=28&type=section&id=Item%206%E2%80%94Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and CFO as required by Sections 302 and 906 of the Sarbanes-Oxley Act, and financial statements formatted in Inline XBRL - The report includes required certifications from the CEO and CFO pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[123](index=123&type=chunk) - Financial statements and notes are provided in Inline Extensible Business Reporting Language (Inline XBRL) format[123](index=123&type=chunk)

Financial Data and Key Metrics Changes - Enerpac's revenue increased by 6% year-over-year to $159 million in Q3 2025, marking record third-quarter revenue since the company's relaunch in 2019 [4][6] - Organic growth, adjusted for foreign exchange and the acquisition of DTA, was 2% [6] - Adjusted earnings per share rose by 9% to $0.51, driven by higher earnings, a lower effective tax rate, and a reduced share count [14] - Adjusted EBITDA increased by 3.4%, with the margin declining by 50 basis points year-over-year to 25.9% due to service project mix and the inclusion of DTA [13][14] - Gross profit margin declined by 140 basis points year-over-year to 50.4% [11] Business Line Data and Key Metrics Changes - The IT and S business saw a 1.5% organic revenue increase year-over-year, with product sales growing by 1% and services by 3% [6] - Cortland Biomedical reported a 19% growth, driven by strong performance in diagnostics, bioprocessing, and robotic surgery [8] Market Data and Key Metrics Changes - The Americas region experienced high single-digit organic growth, driven by demand in aerospace, infrastructure, and nuclear service sectors [9] - The APAC region achieved mid single-digit growth, particularly in heavy lifting technology, benefiting from major rail projects and solar farm opportunities [10] - The EMEA region faced a high single-digit decline, primarily due to a drop in the heavy lifting technology business, although infrastructure and defense markets showed strength [11] Company Strategy and Development Direction - The company is focused on advancing its innovation strategy and has invested in a new innovation lab to enhance R&D capabilities [20] - Enerpac aims to remain price cost neutral amidst tariff impacts and is actively managing expenses to align with market conditions [18][19] - The acquisition of DTA is seen as a strategic move to enhance Enerpac's heavy lifting technology offerings [21] Management's Comments on Operating Environment and Future Outlook - Management expressed caution entering Q4 due to increasing economic and geopolitical uncertainty but remains confident in outperforming industrial peers [5] - The company anticipates delivering towards the lower half of its fiscal 2025 revenue guidance due to current macroeconomic conditions [14] Other Important Information - The company recorded a restructuring charge of $5.9 million, primarily for severance, to right-size its cost structure [12] - Enerpac's net debt was $50 million, resulting in a net debt to adjusted EBITDA ratio of 0.4, indicating a strong balance sheet [15] Q&A Session Summary Question: Customer reactions to tariffs and macro uncertainty - Management noted that while customers are cautious, there have not been significant project cancellations, and underlying investment needs remain [25][26] Question: Revenue pull-forward in anticipation of tariffs - Management indicated there was some minor buying in anticipation of pricing actions, but nothing significant was observed [27] Question: Details on restructuring actions and anticipated cost savings - The restructuring was a response to global uncertainty, with a focus on automation and process standardization to improve efficiency [29][30] Question: Impact of pricing actions on revenue - Pricing actions taken in March and May began to show effects in Q3, with more significant impacts expected in Q4 [36] Question: North American performance drivers - Management highlighted strong performance in aerospace and other diversified end markets as key drivers of growth [38] Question: Outlook for the wind business amid renewable energy credit concerns - Management remains optimistic about the wind market, noting ongoing projects and favorable demand profiles [40] Question: M&A appetite in the current environment - Management confirmed continued focus on M&A as part of growth strategy, with active engagement in discussions with potential sellers [42] Question: Net impact of tariffs expected in Q4 and fiscal 2026 - Management aims to remain price cost neutral despite tariff impacts, with ongoing adjustments to pricing strategies [49] Question: DTA sales performance and guidance - Management expects DTA to come in slightly below original revenue guidance but noted strong order growth and successful cross-selling efforts [51][52] Question: Scalability of the new innovation lab - Management expressed excitement about the new lab's capabilities, which are expected to significantly reduce time to market for new products [60][61]

Financial Data and Key Metrics Changes - Enerpac's revenue increased by 6% year-over-year to $159 million in Q3 2025, marking record revenue since the company's relaunch in 2019 [5][7] - Organic growth, adjusted for foreign exchange and the acquisition of DTA, was 2% [7] - Adjusted EBITDA increased by 3.4%, with a margin decline of 50 basis points year-over-year to 25.9% [13] - Adjusted earnings per share rose by 9% to $0.51, driven by higher earnings and a lower effective tax rate [14] Business Line Data and Key Metrics Changes - The IT and S business saw a 1.5% organic revenue increase year-over-year, with product sales growing by 1% and services by 3% [7][8] - Cortland Biomedical reported a 19% growth, driven by strong performance in diagnostics, bioprocessing, and robotic surgery [8] - The Americas region experienced high single-digit organic growth, particularly in aerospace and infrastructure sectors [9] Market Data and Key Metrics Changes - The APAC region achieved mid single-digit growth, with notable strength in heavy lifting technology and major rail projects in Thailand, Japan, and The Philippines [10] - The EMEA region faced a high single-digit decline, primarily due to a drop in the heavy lifting technology business, although infrastructure and defense markets showed strength [11] Company Strategy and Development Direction - The company is focused on advancing its innovation strategy and has invested in a new innovation lab to enhance R&D capabilities [21] - Enerpac aims to remain price cost neutral amid tariff impacts and is actively managing expenses to align with market conditions [19][20] - The acquisition of DTA is expected to enhance Enerpac's product offerings and operational capabilities, with strong order growth anticipated [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed caution entering Q4 due to economic and geopolitical uncertainties but remains confident in outperforming industrial peers [6] - The company is monitoring customer reactions to tariffs and macroeconomic conditions, noting no significant project cancellations [28][29] - Future revenue guidance for fiscal 2025 remains at $610 million to $625 million, with expectations to deliver towards the lower half of the range [14] Other Important Information - Gross profit margin declined by 140 basis points year-over-year to 50.4%, attributed to service project mix and the inclusion of DTA [11][12] - Net debt stood at $50 million, with a net debt to adjusted EBITDA ratio of 0.4, indicating a strong balance sheet [15] - The company repurchased approximately 330,000 shares for $14 million during the quarter [16] Q&A Session Summary Question: Customer reactions to tariffs and macro uncertainty - Management noted that while customers are cautious, there have been no significant project cancellations, and underlying investment needs remain [28][29] Question: Revenue pull-forward in anticipation of tariffs - Management indicated there was some minor buying activity but nothing significant [30] Question: Details on restructuring actions and anticipated cost savings - Restructuring included severance and a noncash lease impairment charge, aimed at improving efficiency and cost structure [32][33] Question: Impact of pricing actions taken - Pricing actions were implemented in March and May, with expected positive impacts in the upcoming quarter [39] Question: North American performance drivers - Management highlighted diversified end markets, with aerospace and infrastructure contributing to high single-digit growth [40][41] Question: Outlook for the wind market - Management remains optimistic about the wind market, noting ongoing projects and favorable demand profiles [43][44] Question: M&A appetite in the current environment - Management confirmed continued focus on M&A as part of growth strategy, with active engagement in discussions [46][47] Question: Tariff impact on DTA's cross-selling ability - Management acknowledged that DTA products would be subject to tariffs but noted strong demand from US customers [57][58] Question: Context around the new innovation lab - The new lab is expected to significantly reduce time to market for new products, enhancing overall innovation capabilities [66][67]

Financial Performance - Q3 FY25 - Enerpac Tool Group's net sales for Q3 FY25 were $159 million, a 5.5% increase compared to $150 million in Q3 FY24[5] - Organic growth for Enerpac Tool Group was 2.0% in Q3 FY25[5] - Industrial Tools & Service (IT&S) net sales were $153 million in Q3 FY25, up 5.1% from $146 million in Q3 FY24, with organic growth of 1.5%[5] - Adjusted EBITDA was $41 million, a 3% increase year-over-year[12] - Adjusted EPS was $0.51, a 9% increase year-over-year[12] Segment Performance - Q3 FY25 - IT&S Product sales were $124 million, a 5.6% increase with 1.0% organic growth[5] - IT&S Service sales were $29 million, a 3.1% increase with 3.4% organic growth[5] - Other (Cortland Biomedical) sales were $5 million, an 18.7% increase[5] Profitability - Q3 FY25 - Gross margin was 50.4%, a decrease of 140 bps year-over-year[12] - Adjusted SG&A was 25.5% of sales, a decrease of 160 bps year-over-year[12] - Adjusted EBITDA margin was 25.9%, a decrease of 50 bps year-over-year[12] FY25 Guidance - The company expects to deliver towards the lower half of the range on Sales, Adjusted EBITDA, and Free Cash Flow[14] - Net sales are projected to be $610 million to $625 million, with 0-2% organic growth and 3-6% total growth[15] - Adjusted EBITDA is projected to be $150 million to $160 million[15] - Free cash flow is projected to be $85 million to $95 million[15]

Financial Performance - Consolidated net sales for Q3 fiscal 2025 were $158.7 million, a 5.5% increase from $150.4 million in the prior year[6] - Organic revenue growth was 2%, with IT&S organic growth of 1.5% and 18.7% growth at Cortland Biomedical[6] - Net earnings for Q3 were $22.0 million, compared to $22.6 million in the same period last year, with diluted EPS remaining at $0.41[9] - Adjusted EBITDA for Q3 was $41.0 million, up from $39.7 million year-over-year, with an adjusted EBITDA margin of 25.9%[9] - The company expects full-year net sales guidance of $610 million to $625 million, representing growth of 3% to 6%[13] - Net sales for the three months ended May 31, 2025, increased to $158,661 million, up from $150,389 million in the same period of 2024, representing a growth of 7.5%[25] - Gross profit for the nine months ended May 31, 2025, was $227,985 million, compared to $223,608 million for the same period in 2024, reflecting a slight increase of 1.7%[25] - Operating profit for the three months ended May 31, 2025, was $31,681 million, down from $33,363 million in the prior year, indicating a decrease of 5.0%[25] - Net earnings from continuing operations for the nine months ended May 31, 2025, were $64,668 million, compared to $58,798 million in 2024, showing an increase of 10.0%[25] - The diluted earnings per share from continuing operations for the three months ended May 31, 2025, was $0.41, consistent with the prior year[25] - The company experienced a year-over-year net sales growth of 3.9% for the fiscal year 2025 compared to fiscal year 2024[28] Cash Flow and Capital Management - Cash generated from operating activities for the first nine months of fiscal 2025 was $56.0 million, an increase of approximately $19 million from the prior year[11] - The cash balance as of May 31, 2025, was $140.5 million, up from $132.4 million a year earlier[12] - The net debt to adjusted EBITDA ratio improved to 0.4x as of May 31, 2025, down from 0.5x in the prior year[12] - Cash provided by operating activities for continuing operations was $56,030 million for the nine months ended May 31, 2025, compared to $39,544 million in 2024, an increase of 41.5%[27] - Cash used in financing activities for the nine months ended May 31, 2025, was $39,971 million, down from $51,404 million in the same period of 2024[27] - The company reported a net decrease in cash and cash equivalents of $26,588 million for the nine months ended May 31, 2025, compared to a decrease of $22,053 million in 2024[27] - Free Cash Flow is projected to be between $85 million and $95 million[39] Shareholder Actions - The company repurchased approximately 330,000 shares for a total of $14.0 million in Q3[12] Operational Developments - The company completed its relocation to a new headquarters in downtown Milwaukee, enhancing its R&D capabilities[14] - Capital expenditures for the nine months ended May 31, 2025, were $16,360 million, significantly higher than $4,970 million in the same period of 2024[27] - Capital expenditures are anticipated to be between $19 million and $24 million[39] Adjusted Financial Metrics - Adjusted operating profit for Enerpac Tool was $32,439 million, showing a decrease from $37,000 million in the previous quarter[29] - EBITDA from continuing operations was $31,097 million, compared to $36,035 million in the prior quarter, indicating a decline[30] - Adjusted EBITDA reached $34,874 million, down from $39,672 million in the previous quarter[30] - The adjusted operating profit margin for the Industrial Tools & Services segment was 28.1%, slightly down from 29.9% in the previous quarter[29] - Adjusted net earnings from continuing operations for FY2024 totaled $94.6 million, with adjusted diluted earnings per share at $1.72[35] Future Outlook - The company anticipates continued market expansion and product development in FY2025, with a focus on enhancing operational efficiency[36] - Adjusted diluted earnings per share from continuing operations for Q1 FY2025 are projected at $0.40, reflecting a stable outlook[35] - GAAP Operating Profit for Fiscal 2025 is projected between $135 million and $147 million[39] - Adjusted EBITDA is expected to range from $150 million to $160 million[39] - Cash provided by operating activities is estimated to be between $109 million and $114 million[39]

Core Insights - Enerpac Tool Group Corp. reported a total revenue growth of 6% and organic revenue growth of 2% for the third quarter of fiscal 2025, outperforming the soft industrial sector [3][5] - The company is maintaining its full-year guidance, expecting net sales between $610 million and $625 million, reflecting growth of 3% to 6% [12] Financial Performance - Consolidated net sales for the third quarter of fiscal 2025 were $158.7 million, up from $150.4 million in the prior-year period, marking a 5.5% increase [5][10] - Net earnings for the third quarter were $22.0 million, with diluted EPS remaining stable at $0.41 compared to the previous year [8][10] - Adjusted EBITDA for the third quarter was $41.0 million, an increase from $39.7 million year-over-year, with an adjusted EBITDA margin of 25.9% [8][10] Segment Performance - The Industrial Tools & Services (IT&S) segment saw a 5.1% increase in net sales, driven by organic growth and the acquisition of DTA [6] - Organic growth in IT&S product revenue was 1.0%, while service revenue increased by 3.4% [6] Cost Management - Selling, general and administrative expenses (SG&A) rose to $47.0 million, primarily due to restructuring charges of $5.9 million [7] - Adjusted SG&A expenses, excluding restructuring and M&A charges, decreased slightly to $40.4 million from $40.6 million in the prior year [7] Cash Flow and Capital Expenditures - The company generated $56.0 million in cash from operating activities in the first nine months of fiscal 2025, compared to $37.0 million in the same period last year [9] - Capital expenditures for the first nine months were $16.4 million, significantly higher than $5.0 million in the prior year [9] Balance Sheet and Shareholder Returns - As of May 31, 2025, the company had a cash balance of $140.5 million and a debt balance of $190.9 million, resulting in a net debt to adjusted EBITDA ratio of 0.4x [11] - Approximately $14 million was returned to shareholders through share repurchases during the third quarter [10] Strategic Initiatives - The company completed its relocation to a new headquarters in downtown Milwaukee, enhancing its collaborative environment and R&D capabilities [13]

Financial Performance - Net sales for the three months ended February 28, 2025, were $145.528 million, an increase of 5.9% compared to $138.437 million for the same period in 2024[13] - Gross profit for the six months ended February 28, 2025, was $148.083 million, up from $145.725 million in the prior year, reflecting a gross margin improvement[13] - Operating profit for the three months ended February 28, 2025, was $30.820 million, representing a 4.4% increase from $29.521 million in the same quarter of 2024[13] - Net earnings for the three months ended February 28, 2025, were $20.901 million, compared to $17.817 million for the same period in 2024, marking a 17.5% increase[14] - Earnings per share from continuing operations for the six months ended February 28, 2025, were $0.78, up from $0.67 in the same period of 2024[13] - Net earnings for the six months ended February 28, 2025, increased to $42,624 thousand, up from $35,555 thousand for the same period in 2024, representing a growth of 19%[20] - Total revenues for the six months ended February 28, 2025, were $290,724 thousand, an increase from $280,406 thousand in the prior year, marking a growth of 4%[30] - The basic earnings per share from continuing operations for the three months ended February 28, 2025, was $0.38, an increase from $0.33 for the same period in 2024[65] Assets and Liabilities - Total current assets decreased to $349.399 million as of February 28, 2025, from $372.258 million as of August 31, 2024[17] - Total liabilities decreased to $370.649 million as of February 28, 2025, compared to $385.349 million as of August 31, 2024[17] - As of February 28, 2025, the Company recorded long-term debt of $187.1 million, down from $189.5 million as of August 31, 2024[52] - The total shareholders' equity as of February 28, 2025, was $405.978 million, reflecting an increase from $391.979 million at the end of August 31, 2024[66] Cash Flow and Investments - Cash provided by operating activities from continuing operations was $16,108 thousand, compared to $12,065 thousand for the same period last year, reflecting a 33% increase[20] - Cash used in investing activities for the six months ended February 28, 2025, totaled $38,713 thousand, compared to $5,687 thousand in the prior year, reflecting a substantial increase[20] - The ending balance of cash and cash equivalents as of February 28, 2025, was $119,509 thousand, down from $153,693 thousand at the end of February 2024, representing a decrease of 22%[20] Acquisitions and Restructuring - The Company acquired DTA The Smart Move, S.A. for an initial purchase price of $27.2 million, with a potential earn-out of €12.0 million based on financial objectives, totaling a maximum purchase price of €36.0 million[46] - The acquisition of DTA generated net sales of $3.2 million and $6.4 million for the three and six months ended February 28, 2025, reported within the IT&S segment[50] - The ASCEND transformation program incurred total expenses of approximately $2.0 million and $5.6 million for the three and six months ended February 29, 2024, respectively, with total program costs reaching $74.7 million, including $18.6 million in restructuring charges[41] - The company recognized restructuring charges of $398,000 in the three months ended February 29, 2024, with no restructuring charges reported in the same period of 2025[13] Risk Factors - The company continues to face risks related to supply chain issues and geopolitical instability, which may impact future performance[9] Tax and Compliance - The effective income tax rate for the three months ended February 28, 2025, was 24.5%, a decrease from 29.3% in the prior-year period, primarily due to favorable tax impacts from stock compensation[69] - The Company was in compliance with all financial covenants under the credit facility at February 28, 2025, including a net leverage ratio not exceeding 3.75 to 1.00[54] Segment Performance - IT&S segment net sales for the three months ended February 28, 2025, were $140,716,000, an increase from $134,822,000 for the same period in the prior year, representing a growth of approximately 4.4%[71] - Operating profit for the IT&S segment for the six months ended February 29, 2024, was $76,728,000, compared to $72,900,000 for the same period in the prior year, indicating an increase of about 5.0%[71] Share Repurchase - The Company has repurchased a total of 30,411,708 shares for $853.4 million since the inception of its share repurchase program in fiscal 2012[63] - In the six months ended February 29, 2024, the Company repurchased and retired 1,094,231 shares for $30.1 million[64] - The maximum number of shares that may yet be purchased under the current repurchase program is 2,387,522 shares[64]

Financial Data and Key Metrics Changes - Organic sales grew 5% year-over-year, reflecting above-market growth despite a soft industrial sector [5][6] - EBITDA margins were 23.2% for the quarter, slightly down from the prior year due to mix impact, but still at top-tier levels [6][16] - Adjusted earnings per share increased to $0.39 from $0.36, an 8% increase year-over-year [16] Business Line Data and Key Metrics Changes - IT&S business revenue increased 4% organically year-over-year, with product sales up 4% and services up 3% [9] - Cortland Biomedical reported a growth of 33% in the other segment, rebounding from previous shipment delays [10] - Gross profit margins declined 110 basis points year-over-year to 50.5%, impacted by a higher growth in HLT business with lower margins [13][14] Market Data and Key Metrics Changes - High single-digit growth was achieved in the Americas, driven by share gains from the Enerpac Commercial Excellence (ECX) program [10][11] - APAC region also saw high single-digit growth, particularly in India and Singapore, while Australia faced challenges [12] - EMEA region experienced a low single-digit decline in sales, breaking a two-year growth pattern, but still outperforming the market [12] Company Strategy and Development Direction - The company maintains its full-year fiscal 2025 guidance, focusing on global brand leadership and customer-driven innovation [6][32] - The ECX program is being expanded to improve commercial effectiveness and sales funnel management [11][52] - The integration of DTA into the HLT business is progressing well, with cross-selling opportunities being leveraged [28][41] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the power generation and refinery sectors, with positive sentiment from customers [20][21] - The company remains cautious about macroeconomic uncertainties and potential tariff impacts on inflation and growth [32][56] - Infrastructure investments are expected to increase, particularly in Europe, with a favorable outlook from government spending packages [25][26] Other Important Information - The company repurchased approximately 220,000 shares totaling $10.2 million during the quarter [19] - Cash flow from operations was $16 million, up from $7 million in the previous year, with free cash flow slightly up year-over-year [18] Q&A Session Summary Question: Can you provide more color regarding the mix shift toward HLT and expectations for the back-half of the year? - Management noted strong growth in HLT, particularly in the U.S. and Europe, impacting gross margins due to the mix shift [36][37][38] Question: How is the DTA integration going relative to your expectations? - The DTA integration is progressing well, with positive customer response and order activity [40][41] Question: Can you provide more detail on the commercial excellence program and its impact on the Americas? - The ECX program has improved sales funnel management and visibility, contributing to broad-based growth in the Americas [48][52] Question: What are your thoughts on the potential impact of tariffs? - The company is in a favorable position regarding direct impacts from tariffs, with minimal imports from affected regions [55][56] Question: Can you provide updates on the M&A pipeline? - The M&A pipeline remains robust with active conversations and a focus on high-quality, complementary businesses [83][86]