Financial Data and Key Metrics Changes - Enerpac's first quarter revenue for Fiscal 2026 was $144 million, a decrease of 1% year-over-year [5] - Adjusted EBITDA was $32.4 million, representing a margin of 22.4%, while adjusted earnings per share was $0.36 compared to $0.40 in the previous year [8][10] - Gross profit margin was 50.7%, consistent with previous quarters, but impacted by higher tariff-driven costs [7][8] - Free cash flow increased to $13 million, up $10 million year-over-year, attributed to timing of receipts and payments [9] Business Line Data and Key Metrics Changes - In the Industrial Tools and Services (IT&S) segment, product sales grew 4% organically, while IT&S sales declined 3% [3][5] - Standard products saw low single-digit growth, and heavy-lifting technology (HLT) business experienced double-digit growth [5] - Service revenue declined by 26%, primarily in the EMEA region, particularly the U.K. [5][6] Market Data and Key Metrics Changes - Revenue in the Americas grew by 5%, with product revenue expanding by 8% [6] - EMEA revenue declined by 10%, but product revenue in the region grew by 5% [6] - APAC revenue decreased by 8%, affected by a decline in the HLT business and political uncertainties in Southeast Asia [7] Company Strategy and Development Direction - The company is focused on investing in growth strategies, including increasing spending on innovation and expanding sales capabilities in key markets [11][12] - Enerpac aims to capitalize on growth opportunities in power generation and infrastructure, with significant contract wins in bridge and tunnel projects [14][15] - The company is enhancing its e-commerce capabilities and implementing a new technology platform to improve user experience and marketing tools [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the outlook for the year, supported by strong order growth across all geographic regions [11] - The company maintains its full-year guidance, expecting organic revenue growth of 1%-4% and adjusted EBITDA growth of 6% at the midpoint [10] - Management acknowledged challenges in the service business due to market conditions in the U.K. but remains optimistic about future growth and margin expansion [22][23] Other Important Information - The company announced a change in the investor relations team, with Travis Williams leaving and Darren Kozik becoming the main point of contact for investors [16][17] - Enerpac's balance sheet remains strong, with net debt at $49 million and total liquidity of $539 million [9] Q&A Session Summary Question: What caused the sharp decline in service revenue this quarter? - Management indicated disappointment in service revenue performance, primarily due to a contraction in the U.K. market and ongoing initiatives to capture higher-margin business [21][22] Question: Can you elaborate on changes in services to capture higher value business? - Management discussed transitioning from an agent-based model to a direct model to enhance customer relationships and capture more margin [25][26] Question: What is the pricing strategy heading into 2026? - A small, low single-digit price increase was implemented in December, with ongoing efforts to offset tariff impacts and maintain margins [27][51] Question: Can you provide insights on the 2026 organic growth guidance? - Management highlighted an ambitious innovation program with plans for more new product launches compared to the previous fiscal year [33][34] Question: What is the current status of the M&A funnel? - Management noted an increase in M&A activity and expressed optimism about evaluating several opportunities while maintaining a disciplined approach [60]