Core Insights - December 18th was a challenging day for shareholders of Enerpac Tool Group Corp. (NYSE: EPAC) as the broader market declined due to news regarding the Federal Reserve's interest rate policy [1] Group 1: Company Performance - Enerpac Tool Group Corp. faced significant market pressure following the announcement that the Federal Reserve is likely to cut interest rates only twice in the upcoming year [1] Group 2: Market Context - The overall market experienced a plunge, indicating a broader economic concern that could impact various sectors, including those related to Enerpac Tool Group [1]

Financial Data and Key Metrics - Total revenue increased by 2.3% in Q1 2025, with a 1% decline in organic sales for the IT&S business [11] - Gross profit margin declined by 90 basis points to 51.4%, primarily due to lower sales in the Americas and a higher percentage of service revenue [13] - Adjusted SG&A remained flat at 29% of revenue, reflecting effective cost management [14] - Adjusted EBITDA margins declined by 100 basis points, and adjusted EPS increased by 3% to $0.40 [14] - Net debt stood at $63 million, with net-debt leverage of 0.5 times adjusted EBITDA, and total liquidity was $529 million [15] - Free cash flow improved by $11 million due to higher net earnings and lower incentive compensation payments [16] Business Line Performance - IT&S business revenue increased by 2.3% YoY, with a 5.6% increase in service revenue offset by a 3% decline in product sales [11] - Cortland Biomedical reported a 2.6% YoY revenue increase [13] - DTA acquisition contributed $3 million in revenue and $5 million in order volume, with expectations of €20 million in full-year 2025 sales [12] Regional Performance - EMEA region showed positive YoY growth, particularly in the wind market, with strong service revenue driven by petrochemical and power generation markets [20] - Asia Pacific region returned to YoY growth with mid-single-digit sales gains, despite softness in Australia due to mining industry conditions [21] - Americas region remained cautious, with weaker sales of standard industrial tools but gains in Heavy Lifting Technology (HLT) and services [22] Strategic Direction and Industry Competition - The company is focused on cost management and operational efficiency through its Powering Enerpac Performance (PEP) program [24] - Strategic sourcing initiatives have reduced the supplier base from over 6,000 to fewer than 5,000, aiming to further optimize supply chain efficiency [25] - The company is leveraging its global brand leadership and customer-driven innovation to outperform the market [8] Management Commentary on Operating Environment and Future Outlook - The company is monitoring the sluggish industrial macro environment, particularly in the Americas, but remains optimistic about future demand driven by potential policy changes and customer sentiment [8][34] - Management expects growth in the Asia Pacific region and anticipates a more positive demand environment in the Americas in the coming months [21][22] Other Important Information - The company is relocating its headquarters, which is expected to bring long-term benefits [16] - Enerpac is well-positioned for disciplined M&A, internal investments, and opportunistic share repurchases due to strong cash generation and low leverage [17] Q&A Session Summary Question: How did Q1 2025 performance align with expectations? - Q1 2025 played out as expected, with challenges in the industrial environment, but the company remains optimistic about future demand [33][35] Question: Potential impact of tariffs on the business? - The company is in a favorable position regarding potential tariffs, with minimal impact from imports from China and negligible imports from Canada and Mexico [36][37] Question: EMEA region performance and market share gains? - EMEA region continues to outperform despite challenging macro conditions, driven by strong commercial strategies and new product rollouts [39] Question: Drivers of service revenue growth and margin improvement? - Service revenue growth is driven by steady maintenance demand, while margin improvement is expected through operational efficiency and differentiation in service offerings [41][44] Question: Pricing strategy and potential price increases? - The company typically takes price increases 1-2 times a year to recover inflationary costs and has announced low-single-digit price increases for January 2025 [51][52] Question: Infrastructure spending and lead times? - The company sees favorable indicators for infrastructure projects, particularly in Europe and Asia Pacific, and is well-positioned to meet demand with competitive lead times [55][57] Question: Integration of DTA acquisition? - DTA integration is progressing well, with strong order volumes and early success in leveraging Enerpac's global commercial network [72][73] Question: Progress on efficiency initiatives like PEP and ECX? - The company continues to see benefits from its continuous improvement programs, with PEP driving efficiency and ECX being rolled out in EMEA [68][70]

Q1 FY25 EARNINGS DECEMBER 19, 2024 ENERPAC. @ Forward-Looking Statements and Non-GAAP Measures Statements made in this presentation that are not historical are forward-looking statements made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. In addition to statements with respect to guidance, the terms "outlook," "guidance," "may," "should," "could," "anticipate," "believe," "estimate," "expect," "objective," "plan," "project" and similar expressions are intended to identif ...

Company Performance - Enerpac reported quarterly earnings of $0.40 per share, missing the Zacks Consensus Estimate of $0.41 per share, and showing a slight increase from $0.39 per share a year ago, resulting in an earnings surprise of -2.44% [1] - The company posted revenues of $145.2 million for the quarter ended November 2024, surpassing the Zacks Consensus Estimate by 0.83% and increasing from $141.97 million year-over-year [2] - Over the last four quarters, Enerpac has not surpassed consensus EPS estimates, but has topped consensus revenue estimates two times [2] Stock Performance - Enerpac shares have increased approximately 52.3% since the beginning of the year, outperforming the S&P 500's gain of 26.9% [4] - The current consensus EPS estimate for the upcoming quarter is $0.40 on $140 million in revenues, and for the current fiscal year, it is $1.81 on $622 million in revenues [8] Industry Outlook - The Manufacturing - Tools & Related Products industry, to which Enerpac belongs, is currently in the top 24% of over 250 Zacks industries, indicating a favorable outlook [9] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that the industry outlook can significantly impact stock performance [6][9]

First Quarter of Fiscal 2025 Continuing Operations Highlights* Net sales were $145 million, a 2.3% increase compared to the prior year, with a 0.8% decline in organic sales.**Operating margin was 21.4% and adjusted operating margin was 21.5%.Net income was $21.7 million, or $0.40 per diluted share, and adjusted net income was $21.9 million, or $0.40 per diluted share. GAAP and adjusted EPS increased 21% and 3% year-over-year, respectively.Adjusted EBITDA was $34.3 million and adjusted EBITDA margin was 23.6 ...

Wall Street expects a year-over-year increase in earnings on higher revenues when Enerpac (EPAC) reports results for the quarter ended November 2024. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on December 18, 2024, might help the stock move higher if these key numbers are better than exp ...

MILWAUKEE, Wis., Dec. 03, 2024 (GLOBE NEWSWIRE) -- Enerpac Tool Group Corp. (NYSE: EPAC) announced today that it will release its first quarter fiscal 2025 earnings after the market closes on Wednesday, December 18, 2024. Management will conduct a conference call to discuss the results on Thursday, December 19, 2024, beginning at 8:30 a.m. ET / 7:30 a.m. CT. A real-time webcast of the conference call can be accessed via the Investors section of the Company’s website here. For those who are unavailable to li ...

Company Overview - Enerpac Tool Group Corp (EPAC) is a premier industrial tools, services, technology, and solutions company with a diversified global business, serving industries such as refinery/petrochemical, industrial MRO, infrastructure, power generation, and mining [3][4] - The company operates in over 100 countries and is a global leader in high-pressure hydraulic tools, controlled force products, and service solutions [4] Market Opportunity - Enerpac targets infrastructure, rail, wind, and industrial MRO as core markets, with a geographic focus on the Asia Pacific region [3] - The company estimates a serviceable market opportunity of $2 billion to $3 billion for its target verticals, which currently represent a modest portion of its $600 million annual revenue [3] Operational Efficiency - Enerpac's ASCEND transformation program, initiated in March 2022, has driven operational efficiency, with $75 million invested and annual operating profit improvement exceeding $50-$60 million by fiscal 2023, a year ahead of plan [3] - The program has improved gross margins by 180 basis points to 51.1% in fiscal 2024, with adjusted SG&A expenses improving by 50 basis points and adjusted EBITDA margin reaching 25.0%, up 1100 basis points since fiscal 2021 [3] Financial Performance - For fiscal 2025, Enerpac forecasts organic revenue growth of 0% to 2%, with net sales (including DTA acquisition) projected at $610 million to $625 million, representing 5% growth at the midpoint [3] - Adjusted EBITDA for fiscal 2025 is forecasted at $150 million to $160 million, with a margin of 25.1% at the midpoint, including a 50 basis point improvement in the base business [3] Balance Sheet and Cash Flow - As of August 31, 2024, Enerpac had $167.1 million in cash and net debt of $27 million, with a leverage rate of 0.2 times net debt to trailing adjusted EBITDA, well below its target range of 1.5-2.5 times [3] - The company expects robust free cash flow of $85 million to $95 million for fiscal 2025, enabling continued capital investment, strategic M&A, and shareholder returns [3]

Financial Performance - Consolidated net sales for fiscal 2024 were $590 million, a 1% decrease from $598 million in fiscal 2023, impacted by a $23 million decline due to the divestiture of the Cortland Industrial business[93]. - Operating profit for fiscal 2024 was $122 million, an increase of $38 million compared to $84 million in fiscal 2023, driven by improved gross profit and reduced SG&A expenses[93]. - Gross profit as a percentage of sales was approximately 51% in fiscal 2024, up 2% from fiscal 2023, attributed to operational improvements from the ASCEND program[93]. - Service sales increased by 7% in fiscal 2024, totaling $116 million, driven by strong growth in the EMEA region[93]. - Total net sales for the year ended August 31, 2024, were $589.5 million, a decrease of 1.2% from $598.2 million in the previous year[136]. - Net earnings from continuing operations were $82.2 million for the year ended August 31, 2024, compared to $53.6 million in the prior year, representing a 53.4% increase[136]. - Earnings per share from continuing operations increased to $1.51, up from $0.95 in the previous year, marking a 58.9% rise[136]. - The company reported a total comprehensive income of $90.6 million for the year, compared to $60.3 million in the previous year[138]. Strategic Initiatives - The ASCEND transformation program aims to drive accelerated earnings growth and efficiency, focusing on organic growth strategies and operational excellence[36]. - The Company plans to pursue strategic acquisitions to enhance its global market position and broaden its product offerings, but execution may be impacted by financing availability and competition for targets[44]. - The ASCEND transformation program is expected to generate an incremental $40 to $50 million in annual operating profit once fully implemented[155]. - The Company completed the sale of the Cortland Industrial business for net cash proceeds of $20.1 million, recording a net gain of $6.0 million[164]. Risks and Challenges - Supply chain issues, including shortages and increased costs, could adversely impact the company's business and operating results[30]. - The company faces collection risks for receivables in foreign jurisdictions, which may lead to delayed payments or uncollectible balances[34]. - Disruptions in global oil markets, such as those due to geopolitical conflicts, could negatively affect the company's revenues from the oil and gas industry[31]. - The company is exposed to risks related to international operations, including unfavorable currency fluctuations and political instability[39]. - Cybersecurity threats pose risks to the company's systems and operations, necessitating significant investments in technology infrastructure[35]. - The company may not be able to maintain operational improvements from restructuring actions, which could adversely affect financial performance[36]. - Legal and regulatory proceedings, including product liability claims, could result in significant costs that adversely affect financial results[55]. Financial Position - As of August 31, 2024, goodwill and other intangible assets totaled $306 million, representing 39% of the company's total assets[49]. - The company has incurred significant indebtedness, which could harm its operating flexibility and competitive position if additional debt is taken on for acquisitions[56]. - The effective income tax rate for fiscal 2024 and 2023 was both 22.1%, slightly higher than the statutory rate of 21% due to state income taxes and foreign jurisdiction taxes[101]. - Total current assets rose to $372,258 million from $355,640 million, marking a 4.6% increase year-over-year[140]. - Total liabilities decreased to $385,349 million from $435,977 million, a reduction of approximately 11.6%[140]. - Cash and cash equivalents at the end of the period reached $167,094 million, compared to $154,415 million at the end of the previous year, a growth of 8.2%[142]. Shareholder Returns - The Company declared a dividend of $0.04 per share of Class A common stock for fiscal 2024, payable on October 18, 2024[76]. - Since the inception of the initial share repurchase program in fiscal 2012, the Company has repurchased 30,082,181 shares for $839 million[77]. - The Company repurchased 1,309,466 shares for $38.4 million in the year ended August 31, 2024, with a total of 30,082,181 shares repurchased since the inception of the program for $838.9 million[200]. Operational Metrics - The Company operates 1,512 thousand square feet of facilities, with 1,313 thousand square feet for manufacturing and distribution[71]. - The IT&S segment reported net sales of $571 million in fiscal 2024, a 3% increase from $555 million in fiscal 2023, primarily driven by service business growth[96]. - Corporate expenses decreased to $36 million in fiscal 2024, down $27 million from $63 million in fiscal 2023, primarily due to reduced ASCEND transformation program charges[100]. - Cash provided by operating activities was $81 million for fiscal 2024, an increase of $3 million from $78 million in fiscal 2023, attributed to higher earnings from continuing operations[103]. Market Conditions - A significant portion of the company's revenues is derived from cyclical industries, which may be adversely affected during economic contractions[31]. - The market price of the company's common stock may be volatile due to various factors, including quarterly revenue fluctuations and external economic conditions[60]. - The company is exposed to geopolitical risks that could adversely impact its business and financial results[64]. Environmental and Regulatory Factors - Climate-related laws and regulations may negatively impact the company's operations, particularly in the oil & gas sector, which constitutes a significant portion of its revenue[42]. - Environmental expenditures over the past three years have not been material, and management believes potential liabilities will not materially affect financial position[216].

In a release issued under the same headline yesterday by Enerpac Tool Group Corp. (NYSE: EPAC), please note that in the Outlook section, the third paragraph should have read "Forecasted adjusted EBITDA is $150 million to $160 million, with anticipated free cash flow of $85 million to $95 million." and not "Forecasted adjusted EBITDA is $150 million to $160 million, with anticipated free cash flow of $89 million to $99 million." The $85 million to $95 million free cash flow guidance is consistent with the or ...