Enerpac Tool(EPAC) - 2025 Q2 - Quarterly Results

Financial Performance - Consolidated net sales for Q2 FY2025 were $145.5 million, a 5.1% increase from $138.4 million in the prior year[5]. - Organic revenue growth was 5%, driven by a 4.2% increase in the Industrial Tools & Services segment and a 33.1% increase at Cortland Biomedical[3][5]. - Net earnings for Q2 FY2025 were $20.9 million, or $0.38 per diluted share, compared to $17.9 million, or $0.33 per diluted share in the prior year[7][8]. - Adjusted EBITDA for Q2 FY2025 was $33.8 million, with an adjusted EBITDA margin of 23.2%, down from 24.8% in the prior year[9]. - Net sales for the three months ended February 28, 2025, increased to $145.528 million, up from $138.437 million in the same period last year, representing a growth of 5.9%[22]. - Gross profit for the six months ended February 28, 2025, was $148.083 million, compared to $145.725 million for the same period in 2024, reflecting a year-over-year increase of 1.6%[22]. - Operating profit for the three months ended February 28, 2025, was $30.820 million, an increase from $29.521 million in the prior year, marking a growth of 4.4%[22]. - Net earnings from continuing operations for the six months ended February 28, 2025, were $42.624 million, compared to $36.177 million for the same period in 2024, indicating a significant increase of 17.5%[22]. - Basic earnings per share from continuing operations rose to $0.38 for the three months ended February 28, 2025, compared to $0.33 in the same period last year, a growth of 15.2%[23]. - Adjusted net earnings from continuing operations for Fiscal 2024 totaled $82.2 million, with Q1 2025 adjusted net earnings projected at $21.7 million[32]. Projections and Guidance - The company projects net sales for FY2025 to be between $610 million and $625 million, with organic sales growth expected to be approximately 0% to 2%[11]. - The forecast for adjusted EBITDA in FY2025 is between $150 million and $160 million, with free cash flow anticipated to be between $85 million and $95 million[11]. - GAAP Operating profit for Fiscal 2025 is projected to be between $135 million and $147 million[36]. - Cash provided by operating activities is estimated to be between $61 million and $76 million[37]. - Capital expenditures are anticipated to be between $19 million and $24 million[37]. - Management does not provide guidance on certain GAAP financial measures due to unpredictability of specific items[38]. Cash Flow and Capital Management - Cash balance as of February 28, 2025, was $119.5 million, down from $153.7 million a year earlier[10]. - The company reported a net decrease in cash and cash equivalents of $47.585 million for the six months ended February 28, 2025, compared to a decrease of $722 thousand in the prior year[25]. - Cash provided by operating activities for continuing operations was $16.108 million for the six months ended February 28, 2025, up from $12.065 million in the prior year, representing a 33.8% increase[25]. - The company returned $10 million to shareholders through share repurchases in Q2 FY2025[8][10]. Segment Performance - Adjusted operating profit for the Industrial Tools & Services segment was $43,648 million, representing a 29.9% margin[27]. - The Industrial Tools & Services segment's revenue for the quarter was $45,629 million, showing a slight increase from the previous quarter[28]. - Other segment adjusted EBITDA was $1,367 million, with a margin of 25.5%[28]. - The company’s adjusted operating profit margin was 22.5% for the latest quarter[27]. - The Industrial Tools & Services Segment generated net sales of $271.9 million in Fiscal 2024, with organic sales growth of 1.6% in Q1 2025 compared to Q1 2024[31]. Expenses and Charges - Gross profit margin declined to 50.5%, a decrease of 110 basis points year-over-year due to a shift in product sales[7]. - The adjusted selling, general and administrative expenses for the six months ended February 28, 2025, totaled $83.741 million, compared to $82.938 million in the same period last year, reflecting a slight increase of 0.9%[22]. - The company incurred restructuring charges totaling $7.8 million for Fiscal 2024, impacting overall profitability[32]. - M&A charges amounted to $413,000 in Fiscal 2024, reflecting ongoing strategic initiatives in mergers and acquisitions[33]. - The ASCEND transformation program charges totaled $7.0 million for Fiscal 2024, highlighting investment in operational improvements[33]. - Financing costs for the quarter were $13,524 million, reflecting an increase compared to previous periods[27]. Strategic Initiatives - The company plans to continue its market expansion and product development initiatives, focusing on enhancing operational efficiency and driving growth in key segments[26]. - The company is focusing on market expansion and new product development as part of its strategic initiatives[29]. - The service product line saw organic sales growth of 5.6% in Q1 2025, indicating strong demand in this segment[31].