Enerpac Tool Group Reports Second Quarter Fiscal 2025 Results
Second Quarter of Fiscal 2025 Continuing Operations Highlights*
Net sales were $146 million, a 5.1% increase compared to the prior year, with a 5.0% increase in organic sales.1
Operating profit margin was 21.2% and adjusted operating profit margin was 21.4%
Net earnings were $20.9 million, or $0.38 per diluted share. Adjusted net earnings were $21.2 million, or $0.39 per diluted share.
GAAP EPS and adjusted EPS increased 15% and 8% year-over-year, respectively.
Adjusted EBITDA was $33.8 million and adjusted EBITDA margin was 23.2%.
Returned $10 million to shareholders through share repurchases.
*This press release contains financial measures in accordance with U.S. Generally Accepted Accounting Principles ("GAAP") in addition to non-GAAP financial measures. Reconciliations of the non-GAAP financial measures to the comparable GAAP measures are presented in the tables accompanying this release.
MILWAUKEE, March 24, 2025 (GLOBE NEWSWIRE) -- Enerpac Tool Group Corp. (NYSE:EPAC) (the "Company" or "Enerpac") today announced results for its fiscal second quarter ended February 28, 2025.
"We were pleased with Enerpac's solid performance in the second quarter, highlighted by strong organic revenue growth of 5%, which continued to outperform the soft industrial sector," said Paul Sternlieb, Enerpac Tool Group's President & CEO.
Consolidated Results from Continuing Operations
(US$ in millions, except per share)
Three Months Ended
Six Months Ended
February 28, 2025
February 29, 2024
February 28, 2025
February 29, 2024
Net Sales
$145.5
$138.4
$290.7
$280.4
Net Earnings
20.9
17.9
42.6
36.2
Diluted EPS
0.38
0.33
0.78
0.66
Adjusted Diluted EPS
0.39
0.36
0.79
0.76
Adjusted EBITDA
33.8
34.3
68.1
69.2
Second Quarter Fiscal 2025 Consolidated Results Comparisons
"Profitability remained at high levels in the second quarter of fiscal 2025, although gross margins were impacted by a mix shift," said Darren Kozik, Executive Vice President and Chief Financial Officer. "At the same time, our top-line growth reflected Enerpac's strong brand and ability to execute in a challenging environment."
Consolidated net sales for the second quarter of fiscal 2025 were $145.5 million compared to $138.4 million in the prior-year period, an increase of 5.1%. On an organic basis, sales increased 5.0% year-over-year, driven by IT&S organic growth of 4.2% and 33.1% growth at Cortland Biomedical. The strengthening of the U.S. dollar negatively impacted sales by $2.9 million in the period.
Net sales for the Industrial Tools & Services segment (IT&S) increased 4.4%, driven by organic growth and the acquisition of DTA, partially offset by the negative impact of foreign exchange rates. IT&S Product sales increased 4.4% on an organic basis and Service revenue increased 3.4% year-over-year.
Gross profit margin declined 110 basis points year-over-year to 50.5% as a result of a shift in product sales towards Heavy Lifting Technologies (HLT) as well as the mix of service projects in the quarter. Selling, general and administrative expenses (SG&A) of $41.4 million increased 0.7% year-over-year, or 4.6% on an adjusted basis.
Second quarter fiscal 2025 net earnings and diluted EPS were $20.9 million and $0.38 respectively, compared to $17.9 million and $0.33, respectively, in the year-ago period.
Second quarter adjusted EBITDA was $33.8 million compared to $34.3 million in the year-ago period. Adjusted EBITDA margin declined 160 basis points year-over-year to 23.2% due to gross margin pressures discussed above and the inclusion of DTA, partially offset by a return to normalized profitability at Cortland Biomedical.
Balance Sheet and Leverage
(US$ in millions)
February 28, 2025
November 30, 2025
February 29, 2024
Cash Balance
$119.5
$130.7
$153.7
Debt Balance
$192.1
$193.3
$244.9
Net Debt to Adjusted EBITDA2
0.5x
0.5x
0.7x
Net debt on February 28, 2025, was $72.6 million, resulting in a net debt to adjusted EBITDA ratio of 0.5x. The company repurchased approximately 220,000 shares of its common stock in the second quarter of fiscal 2025 for a total of $10.2 million under its share repurchase program announced in March 2022.
Outlook
"In light of the macro uncertainty and the prospect of lower economic growth resulting from tariffs or other geopolitical events, we maintain a cautious tone," concluded Sternlieb. "Nonetheless, given our growth through the first half of fiscal 2025, we are reiterating full-year guidance, including sales and adjusted EBITDA growth of 5 percent at the midpoint."
The Company is projecting a net sales range of $610 million to $625 million in fiscal 2025. The forecast anticipates organic sales growth of approximately 0% to 2%, with expected adjusted EBITDA in the range of $150 million to $160 million, and free cash flow between $85 million to $95 million. This forecast is based on the Company's key foreign exchange rate assumptions and assumes that there is no broad-based global recession.
Conference Call Information
An investor conference call is scheduled for 7:30 am CT on March 25, 2025. Webcast information and conference call materials, including an earnings presentation, are available on the Enerpac Tool Group company website (www.enerpactoolgroup.com).
1Organic sales represent net sales excluding the impact of foreign exchange rates, acquisitions, and divestitures. A reconciliation of organic sales to comparable net sales is presented in the tables accompanying this release.
2Calculated in accordance with the terms of the Company's September 2022 Senior Credit Facility.
Safe Harbor Statement
Certain of the above comments represent 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 identify forward-looking statements. Such forward-looking statements are subject to inherent risks and uncertainties that may cause actual results or events to differ materially from those contemplated by such forward-looking statements. In addition to the assumptions and other factors referred to specifically in connection with such statements, risks and uncertainties that may cause actual results or events to differ materially from those contemplated by such forward-looking statements include, without limitation, general economic uncertainty, market conditions in the industrial, oil & gas, energy, power generation, infrastructure, commercial construction, truck and automotive industries, supply chain risks, including disruptions in deliveries from suppliers due to political tensions; impacts from the imposition, or threat of imposition, of tariffs, the impact of geopolitical activity, including the invasion of Ukraine by Russia and international sanctions imposed in response thereto, as well as armed conflicts in the Middle East, including the impact on shipping in the Red Sea, the ability of the Company to achieve its plans or objectives related to its growth strategy, market acceptance of existing and new products, market acceptance of price increases, successful integration of acquisitions, the impact of dispositions and restructurings, the ability of the Company to continue to achieve its plans or objectives related to the PEP program, operating margin risk due to competitive pricing and operating efficiencies, risks related to reliance on independent agents and distributors for the distribution and service of products, material, labor, or overhead cost increases, tax law changes, foreign currency risk, interest rate risk, commodity risk, tariffs, litigation matters, cybersecurity risk, impairment of goodwill or other intangible assets, the Company's ability to access capital markets and other risks and uncertainties that may be referred to or noted in the Company's reports filed with the Securities and Exchange Commission from time to time, including those described in the Company's Form 10-K for the fiscal year ended August 31, 2024. Enerpac Tool Group disclaims any obligation to publicly update or revise any forward-looking statements as a result of new information, future events or any other reason.
Non-GAAP Financial Information
This press release contains financial measures that are not measures presented in conformity with GAAP. These non-GAAP measures include organic sales, EBITDA from continuing operations, adjusted EBITDA from continuing operations, adjusted earnings from continuing operations, adjusted diluted earnings per share from continuing operations, adjusted operating profit from continuing operations, segment adjusted operating profit and adjusted EBITDA, adjusted corporate expense, adjusted SG&A expense, free cash flow and net debt. This press release includes reconciliations of non-GAAP measures to the most comparable GAAP measure, included in the tables attached to this press release or in footnotes to the tables included in this press release. Management believes the non-GAAP measures presented in this press release are commonly used financial measures for investors to evaluate Enerpac Tool Group's operating performance and financial position with respect to the periods presented and, when read in conjunction with the condensed consolidated financial statements, present a useful tool to evaluate ongoing operations and provide investors with metrics they can use to evaluate aspects of the Company's performance from period to period. In addition, these are some of the financial metrics management uses in internal evaluations of the overall performance of the Company's business. Management acknowledges that there are many items that impact a company's reported results and the adjustments reflected in these non-GAAP measures are not intended to present all items that may have impacted these results. In addition, these non-GAAP measures are not necessarily comparable to similarly titled measures used by other companies.
About Enerpac Tool Group
Enerpac Tool Group Corp. is a premier industrial tools, services, technology, and solutions provider serving a broad and diverse set of customers and end markets for mission-critical applications in more than 100 countries. The Company makes complex, often hazardous jobs possible safely and efficiently. Enerpac Tool Group's businesses are global leaders in high pressure hydraulic tools, controlled force products, and solutions for precise positioning of heavy loads that help customers safely and reliably tackle some of the most challenging jobs around the world. The Company was founded in 1910 and is headquartered in Menomonee Falls, Wisconsin. Enerpac Tool Group common stock trades on the NYSE under the symbol EPAC. For further information on Enerpac Tool Group and its businesses, visit the Company's website at www.enerpactoolgroup.com.
(tables follow)
Enerpac Tool Group Corp.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
February 28,
August 31,
2025
2024
Assets
Current assets
Cash and cash equivalents
$
119,509
$
167,094
Accounts receivable, net
111,993
104,335
Inventories, net
80,431
72,887
Other current assets
37,466
27,942
Total current assets
349,399
372,258
Property, plant and equipment, net
49,026
40,285
Goodwill
277,241
269,597
Other intangible assets, net
46,682
36,058
Other long-term assets
54,279
59,130
Total assets
$
776,627
$
777,328
Liabilities and Shareholders' Equity
Current liabilities
Current maturities of long-term debt
$
5,000
$
5,000
Trade accounts payable
43,903
43,368
Accrued compensation and benefits
19,080
25,856
Income taxes payable
3,207
5,321
Other current liabilities
42,842
49,848
Total current liabilities
114,032
129,393
Long-term debt, net
187,086
189,503
Deferred income taxes
8,632
3,696
Pension and postretirement benefit liabilities
8,449
10,073
Other long-term liabilities
52,450
52,684
Total liabilities
370,649
385,349
Shareholders' equity
Capital stock
10,852
10,847
Additional paid-in capital
236,019
235,660
Retained earnings
290,008
261,870
Accumulated other comprehensive loss
(130,901
)
(116,398
)
Stock held in trust
(3,575
)
(3,777
)
Deferred compensation liability
3,575
3,777
Total shareholders' equity
405,978
391,979
Total liabilities and shareholders' equity
$
776,627
$
777,328
Enerpac Tool Group Corp.
Condensed Consolidated Statements of Earnings
(In thousands)
Three Months Ended
Six Months Ended
February 28,
February 29,
February 28,
February 29,
2025
2024
2025
2024
Net sales
$
145,528
$
138,437
$
290,724
$
280,406
Cost of products sold
72,097
66,962
142,641
134,681
Gross profit
73,431
71,475
148,083
145,725
Selling, general and administrative expenses
41,423
40,723
83,741
82,938
Amortization of intangible assets
1,188
833
2,390
1,657
Restructuring charges
-
398
-
2,799
Impairment & divestiture charges
-
-
-
147
Operating profit
30,820
29,521
61,952
58,184
Financing costs, net
2,371
3,711
5,140
7,408
Other expense, net
750
543
1,237
1,535
Earnings before income tax expense
27,699
25,267
55,575
49,241
Income tax expense
6,798
7,396
12,951
13,064
Net earnings from continuing operations
20,901
17,871
42,624
36,177
Loss from discontinued operations, net of income taxes
-
(54
)
-
(622
)
Net earnings
$
20,901
$
17,817
$
42,624
$
35,555
Earnings per share from continuing operations
Basic
$
0.38
$
0.33
$
0.78
$
0.67
Diluted
0.38
0.33
0.78
0.66
Loss per share from discontinued operations
Basic
$
-
$
(0.00
)
$
-
$
(0.01
)
Diluted
-
(0.00
)
-
(0.01
)
Earnings per share
Basic
$
0.38
$
0.33
$
0.78
$
0.65
Diluted
0.38
0.33
0.78
0.65
Weighted average common shares outstanding
Basic
54,397
54,213
54,319
54,370
Diluted
54,808
54,685
54,810
54,846
Enerpac Tool Group Corp.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Six Months Ended
February 28,
February 29,
2025
2024
Operating Activities
Cash provided by operating activities - continuing operations
16,108
12,065
Cash used in operating activities - discontinued operations
-
(5,413
)
Cash provided by operating activities
$
16,108
$
6,652
Investing Activities
Capital expenditures
(11,517
)
(3,152
)
Cash paid for business acquisitions, net of cash acquired
(27,196
)
-
Working capital adjustment from the sale of business assets
-
(1,133
)
Purchase of business assets
-
(1,402
)
Cash used in investing activities - continuing operations
$
(38,713
)
$
(5,687
)
Cash used in investing activities
$
(38,713
)
$
(5,687
)
Financing Activities
Borrowings on revolving credit facility
14,421
48,000
Principal repayments on revolving credit facility
(14,421
)
(16,000
)
Principal repayments on term loan
(2,500
)
(1,250
)
Purchase of treasury shares
(14,555
)
(30,108
)
Stock options, taxes paid related to the net share settlement of equity awards & other
(5,847
)
(205
)
Payment of cash dividend
(2,167
)
(2,178
)
Cash used in financing activities - continuing operations
$
(25,069
)
$
(1,741
)
Cash used in financing activities
$
(25,069
)
$
(1,741
)
Effect of exchange rate changes on cash
89
54
Net decrease from cash and cash equivalents
$
(47,585
)
$
(722
)
Cash and cash equivalents - beginning of period
167,094
154,415
Cash and cash equivalents - end of period
$
119,509
$
153,693
Enerpac Tool Group Corp.
Supplemental Unaudited Data
Reconciliation of GAAP Measures to Non-GAAP Measures for Continuing Operations
(In thousands)
Fiscal 2024
Fiscal 2025
Q1
Q2
Q3
Q4
TOTAL
Q1
Q2
Q3
Q4
TOTAL
Net Sales
Industrial Tools & Services Segment
$
137,035
$
134,822
$
145,936
$
153,360
$
571,153
$
140,134
$
140,716
$
-
$
-
$
280,850
Other
4,935
3,615
4,453
5,354
18,357
5,062
4,812
-
-
9,874
Enerpac Tool Group ...
