Enerpac Tool Group Reports Second Quarter Fiscal 2023 Results, Increases Expected Ongoing Benefit From ASCEND Transformation Program, and Raises Full-Year Guidance

Second Quarter of Fiscal 2023 Continuing Operations Highlights*

  • Net sales were $142 million, with a 6% year-over-year increase in core sales; the strengthening of the US dollar reduced sales by 2% year over year
  • GAAP operating margin was 9.8% and adjusted operating margin was 20.2%
  • Adjusted EBITDA margin was 22.7%, an increase of nearly 1,100 basis points year over year
  • Reported record gross profit margins and adjusted EBITDA margins since launch of Enerpac Tool Group in 2019
  • GAAP diluted earnings per share (“EPS”) was $0.12 and adjusted diluted EPS was $0.35
  • Leverage (Net Debt to Adjusted EBITDA) was 0.9x at February 28, 2023
  • Ongoing incremental adjusted EBITDA benefit from ASCEND transformation program higher than initially projected at launch of program
  • Raising full year fiscal 2023 guidance

*This news release contains financial measures in accordance with US Generally Accepted Accounting Principles (“GAAP”) in addition to non-GAAP financial measures. Reconciliations of the GAAP to non-GAAP financial measures can be found in the tables accompanying this release.

Enerpac Tool Group Corp. (NYSE: EPAC) (the “Company”) today announced results for its fiscal second quarter ended February 28, 2023.

“Thanks to solid execution by our global team, we delivered strong and encouraging performance in the second quarter. While the second quarter is typically our seasonally weakest quarter, we saw year-over-year core growth in three out of four regions and we achieved record gross profit margins and adjusted EBITDA margins since the launch of Enerpac Tool Group in 2019. We continued to execute our growth strategies and made accelerated progress on our ASCEND transformation program,” said Paul Sternlieb, Enerpac Tool Group’s President & CEO.

Mr. Sternlieb continued, “Having now reached the one-year anniversary since the launch of our ASCEND transformation program, we are extremely pleased with the continued progress we have made on the accelerated execution of several ASCEND initiatives, and as a result we have increased the expected annual adjusted EBITDA benefit of the program from the original goal of $40-$50 million to a new goal of $50-$60 million as we exit fiscal 2024. We are driving positive, meaningful, and permanent change across our organization, making us more efficient, more productive, and easier to do business with. We are also undertaking key growth investments in areas such as our expansion in targeted vertical markets, our digital transformation and digital marketing program, our customer-driven innovation, and our expansion in Asia Pacific. While the global macroeconomic environment remains uncertain, we believe the improvements we are making through ASCEND and the execution of our differentiated growth strategy have us well positioned to deliver enhanced shareholder value.”

Consolidated Results from Continuing Operations

 

(US$ in millions, except per share)

 

 

Three Months Ended

 

Six Months Ended

February 28,

2023

February 28,

2022

 

February 28,

2023

 

February 28,

2022

Net Sales

$142.0

$136.6

 

$281.3

 

$267.5

Net Income

$7.2

 

$2.1

 

$13.6

 

$5.3

Diluted Earnings Per Share

$0.12

$0.03

 

$0.24

 

$0.09

Adjusted Diluted Earnings Per Share

$0.35

$0.14

 

$0.65

 

$0.30

  • Consolidated net sales for the second quarter of fiscal 2023 were $142.0 million compared to $136.6 million in the prior year second quarter. Core sales improved 6% year over year, with product sales up 9% and service revenues down 4%, as the Company implemented a more selective process for quoting service projects that is focused on more differentiated solutions. The impact from foreign currency exchange rates reduced net sales by 2% in the quarter compared to the prior year.
  • Fiscal 2023 second quarter net income and diluted earnings per share were $7.2 million and $0.12, respectively, compared to net income and diluted EPS of $2.1 million and $0.03, respectively, in the second quarter of fiscal 2022. Fiscal 2023 second quarter net income included:
    • Restructuring charges of $3.0 million ($2.8 million, or $0.05 per share, after tax) attributable to ASCEND initiatives;
    • ASCEND transformation program charges (“ASCEND charges”) of $11.4 million ($10.0 million, or $0.17 per share, after tax) including third-party fees for program implementation support;
    • Leadership transition charges of $0.2 million ($0.2 million, or $0.00 per share, after tax);
    • M&A charges of $0.2 million ($0.2 million, or $0.00 per share, after tax); and
    • Tax expense of $0.1 million ($0.00 per share) related to equity compensation deferred tax adjustments and debt issuance costs.
  • Fiscal 2022 second quarter net income included a restructuring charge of $1.8 million ($1.7 million, or $0.03 per share, after tax) attributable to changes to flatten and simplify the organizational structure, impairment and divestiture charges of $1.1 million ($0.8 million, or $0.01 per share, after tax) related to intangible assets from historical acquisitions, business review charges of $2.5 million ($2.3 million, or $0.04 per share, after tax) related to external support for the deep dive business review, leadership transition charges of $1.7 million ($1.6 million, or $0.03 per share, after tax), and tax expense of $0.2 million ($0.00 per share) related to equity compensation deferred tax adjustments.
  • Excluding the items detailed above, adjusted diluted EPS was $0.35 for the second quarter of fiscal 2023 compared to $0.14 in the comparable prior year period.
  • Consolidated net sales for the six months ended February 28, 2023 were $281.3 million, compared to $267.5 million in the comparable prior year period. Core sales increased 9% year over year, while the impact of foreign currency decreased net sales by 4%.
  • Fiscal 2023’s first half net income and diluted EPS were $13.6 million and $0.24, respectively, compared to net income and diluted EPS of $5.3 million and $0.09, respectively in the comparable prior year period.

Industrial Tools & Service (IT&S)

 

(US$ in millions)

 

 

Three Months Ended

 

Six Months Ended

February 28,

2023

February 28,

2022

 

February 28,

2023

 

February 28,

2022

Net Sales

$130.9

$125.9

 

$258.2

 

$247.3

Operating Profit

$30.4

 

$12.6

 

$57.1

 

$30.6

Operating Profit %

23.3%

 

10.0%

 

22.1%

 

12.4%

Adjusted Op Profit (1)

$34.8

$15.7

 

$63.9

 

$35.3

Adjusted Op Profit % (1)

26.6%

12.4%

 

24.8%

 

14.3%

 

 

 

 

 

 

 

 

(1) Excludes approximately $2.6 million of restructuring charges and $1.8 million of ASCEND charges in the second quarter of fiscal 2023 and $1.5 million of restructuring charges, $1.1 million of impairment & divestiture charges and $0.4 million of leadership transition charges in the second quarter of fiscal 2022. The six months ended February 28, 2023 excludes $3.5 million of restructuring charges and $3.3 million of ASCEND charges compared to $3.1 million of restructuring charges, $1.1 million of impairment & divestiture charges and $0.4 million of senior leadership transition charges in the prior year period.

  • Second quarter fiscal 2023 net sales were $130.9 million, 4% higher than the prior fiscal year’s second quarter net sales. Core sales increased 7% year over year.
  • Operating profit margin and adjusted operating profit margin increased year over year to 23.3% and 26.6%, respectively, primarily due to ASCEND initiatives, pricing actions, savings from cost management and restructuring initiatives implemented in prior periods, despite increased material costs. The prior year second quarter also included a $3.1 million increase in receivable reserves that did not repeat in the current year quarter.

Corporate Expenses from Continuing Operations

  • Corporate expenses were $17.6 million and $8.4 million for the second quarter of fiscal 2023 and fiscal 2022, respectively.
  • Adjusted corporate expenses(2) of $7.3 million for the second quarter of fiscal 2023 were $3.0 million higher than the comparable adjusted prior year period expense of $4.3 million, primarily due to increased salary and benefits, incentive compensation, and a prior year benefit received related to a legal settlement slightly offset by restructuring savings.

(2) Excludes approximately $0.4 million of restructuring charges, $9.5 million of ASCEND charges, $0.2 million of leadership transition charges and $0.2 million of M&A charges in the second quarter of fiscal 2023 compared to $0.3 million of restructuring charges, $2.5 million of business review charges and $1.3 million of leadership transition charges in the second quarter of fiscal 2022.

Balance Sheet and Leverage

 

(US$ in millions)

 

 

Period Ended

 

February 28, 2023

November 30, 2022

February 28, 2022

Cash Balance

 

$124.7

$129.2

$133.4

Debt Balance

 

$209.3

$202.2

$175.0

Net Debt to Adjusted EBITDA**

 

0.9

0.7

0.6

 

 

 

 

 

 

 

Net debt at February 28, 2023 was approximately $85 million (total debt of $209 million less $125 million of cash), which increased approximately $12 million from November 30, 2022. Net Debt to Adjusted EBITDA from continuing operations was 0.9x at February 28, 2023.

**Periods as of and subsequent to August 31, 2022 calculated in accordance with the terms of the Company’s September 2022 Senior Credit Facility. Prior periods calculated in accordance with the terms of the Company’s March 2019 Senior Credit Facility.

Outlook

Mr. Sternlieb concluded, “Taking into consideration our solid year-to-date performance, the strengthening of the Euro and British Pound and resulting current foreign exchange rates, the success of our ASCEND transformation program which is well ahead of plan, and our view on the remainder of the fiscal year, we now expect full-year net sales of $580 to $600 million and an adjusted EBITDA range of $118 to $128 million, including an ASCEND EBITDA benefit of $32 to $38 million. Our original guidance included $15 million of EBITDA from initiatives that have now matured through our ASCEND pipeline, and will be attributable to ASCEND, but that are not incremental to our guidance. Our guidance is based on current foreign exchange rates and assumes that there is not a broad-based recession.”

Conference Call Information

An investor conference call is scheduled for 7:30 am CT on March 22, 2023. Webcast information and conference call materials, including an earnings presentation, are available on the Enerpac Tool Group company website (www.enerpactoolgroup.com).

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 “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, the impact of geopolitical activity, including the invasion of Ukraine by Russia and international sanctions imposed in response thereto, any further economic impact of the COVID-19 pandemic, 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 achieve its plans or objectives related to the ASCEND program, including any assumptions underlying its calculation of expected incremental EBITDA or program investment, operating margin risk due to competitive pricing and operating efficiencies, supply chain risk, material, labor, or overhead cost increases, tax law changes, foreign currency risk, interest rate risk, commodity risk, tariffs, litigation matters, 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, 2022 and most recent report on Form 10-Q. 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 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, free cash flow and net debt. This press release includes reconciliations of non-GAAP measures to the most comparable GAAP measure, including in the tables attached to 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 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,
 

 

2023

 

 

2022

 

Assets  
Current assets  
Cash and cash equivalents  

$

124,663

 

$

120,699

 

Accounts receivable, net  

 

100,339

 

 

106,747

 

Inventories, net  

 

94,206

 

 

83,672

 

Other current assets  

 

36,082

 

 

31,262

 

Total current assets  

 

355,290

 

 

342,380

 

   
Property, plant and equipment, net  

 

41,248

 

 

41,372

 

Goodwill  

 

262,143

 

 

257,949

 

Other intangible assets, net  

 

39,716

 

 

41,507

 

Other long-term assets  

 

74,790

 

 

74,104

 

   
Total assets  

$

773,187

 

$

757,312

 

   
Liabilities and Shareholders' Equity  
Current liabilities  
Trade accounts payable  

$

54,291

 

$

72,524

 

Accrued compensation and benefits  

 

24,180

 

 

21,390

 

Current maturities of debt  

 

2,500

 

 

-

 

Short-term debt  

 

-

 

 

4,000

 

Income taxes payable  

 

6,609

 

 

4,594

 

Other current liabilities  

 

55,839

 

 

50,680

 

Total current liabilities  

 

143,419

 

 

153,188

 

   
Long-term debt, net  

 

206,754

 

 

200,000

 

Deferred income taxes  

 

8,478

 

 

7,355

 

Pension and postretirement benefit liabilities  

 

11,701

 

 

11,941

 

Other long-term liabilities  

 

62,047

 

 

66,217

 

Total liabilities  

 

432,399

 

 

438,701

 

   
Shareholders' equity  
Capital stock  

 

16,746

 

 

16,679

 

Additional paid-in capital  

 

215,879

 

 

212,986

 

Treasury stock  

 

(742,844

)

 

(742,844

)

Retained earnings  

 

978,701

 

 

966,751

 

Accumulated other comprehensive loss  

 

(127,694

)

 

(134,961

)

Stock held in trust  

 

(3,320

)

 

(3,209

)

Deferred compensation liability  

 

3,320

 

 

3,209

 

Total shareholders' equity  

 

340,788

 

 

318,611

 

   
Total liabilities and shareholders' equity  

$

773,187

 

$

757,312

 

Enerpac Tool Group Corp.
Condensed Consolidated Statements of Earnings
(In thousands, except per share amounts)
(Unaudited)
 
Three Months Ended Six Months Ended
February 28, February 28, February 28, February 28,

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net sales

$

141,960

 

$

136,599

 

$

281,342

 

$

267,502

 

Cost of products sold

 

71,593

 

 

76,618

 

 

143,069

 

 

147,895

 

Gross profit

 

70,367

 

 

59,981

 

 

138,273

 

 

119,607

 

 
Selling, general and administrative expenses

 

52,059

 

 

50,668

 

 

105,306

 

 

99,145

 

Amortization of intangible assets

 

1,349

 

 

1,881

 

 

2,717

 

 

3,886

 

Restructuring charges

 

2,987

 

 

1,832

 

 

3,969

 

 

4,569

 

Impairment & divestiture charges

 

-

 

 

1,116

 

 

-

 

 

1,116

 

Operating profit

 

13,972

 

 

4,484

 

 

26,281

 

 

10,891

 

 
Financing costs, net

 

3,105

 

 

755

 

 

5,920

 

 

1,716

 

Other expense, net

 

721

 

 

271

 

 

1,423

 

 

751

 

Earnings before income tax expense

 

10,146

 

 

3,458

 

 

18,938

 

 

8,424

 

 
Income tax expense

 

2,988

 

 

1,337

 

 

5,370

 

 

3,118

 

Net earnings from continuing operations

 

7,158

 

 

2,121

 

 

13,568

 

 

5,306

 

Loss from discontinued operations, net of income taxes

 

(2,661

)

 

(900

)

 

(1,618

)

 

(1,297

)

Net earnings

$

4,497

 

$

1,221

 

$

11,950

 

$

4,009

 

 
Earnings per share from continuing operations
Basic

$

0.13

 

$

0.04

 

$

0.24

 

$

0.09

 

Diluted

 

0.12

 

 

0.03

 

 

0.24

 

 

0.09

 

 
Loss per share from discontinued operations
Basic

$

(0.05

)

$

(0.01

)

$

(0.03

)

$

(0.02

)

Diluted

 

(0.05

)

 

(0.01

)

 

(0.03

)

 

(0.02

)

 
Earnings per share*
Basic

$

0.08

 

$

0.02

 

$

0.21

 

$

0.07

 

Diluted

 

0.08

 

 

0.02

 

 

0.21

 

 

0.07

 

 
Weighted average common shares outstanding
Basic

 

57,042

 

 

60,387

 

 

56,964

 

 

60,324

 

Diluted

 

57,500

 

 

60,689

 

 

57,409

 

 

60,655

 

 
*The total of earnings per share from continuing operations and loss per share from discontinued operations may not equal earnings per share due to rounding.
Enerpac Tool Group Corp.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 
Three Months Ended Six Months Ended
February 28, February 28, February 28, February 28,

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Operating Activities
Cash (used in) provided by operating activities - continuing operations

$

(9,856

)

 

9,181

 

$

7,959

 

 

5,241

 

Cash provided by (used in) operating activities - discontinued operations

 

2,100

 

 

222

 

 

1,818

 

 

(564

)

Cash (used in) provided by operating activities

$

(7,756

)

$

9,403

 

$

9,777

 

$

4,677

 

 
Investing Activities
Capital expenditures

 

(2,437

)

 

(1,537

)

 

(5,465

)

 

(4,830

)

Proceeds from sale of property, plant and equipment

 

91

 

 

30

 

 

584

 

 

163

 

Cash used in investing activities - continuing operations

 

(2,346

)

 

(1,507

)

 

(4,881

)

 

(4,667

)

Cash used in investing activities

$

(2,346

)

$

(1,507

)

$

(4,881

)

 

(4,667

)

 
Financing Activities
Borrowings on revolving credit facility

 

20,000

 

 

10,000

 

 

41,000

 

 

15,000

 

Principal repayments on revolving credit facility

 

(13,000

)

 

(10,000

)

 

(31,000

)

 

(15,000

)

Proceeds from issuance of term loan

 

-

 

 

-

 

 

200,000

 

 

-

 

Payment for redemption of revolver

 

-

 

 

-

 

 

(200,000

)

 

-

 

Swingline borrowings/repayments, net

 

-

 

 

-

 

 

(4,000

)

 

-

 

Payment of debt issuance costs

 

(69

)

 

-

 

 

(2,486

)

 

-

 

Stock options, taxes paid related to the net share settlement of equity awards & other

 

(1,456

)

 

(1,915

)

 

(1,453

)

 

(3,223

)

Payment of cash dividend

 

-

 

 

-

 

 

(2,274

)

 

(2,409

)

Cash provided by (used in) financing activities - continuing operations

$

5,475

 

 

(1,915

)

$

(213

)

 

(5,632

)

Cash provided by (used in) financing activities

$

5,475

 

 

(1,915

)

$

(213

)

 

(5,632

)

 
Effect of exchange rate changes on cash

 

47

 

 

916

 

 

(719

)

 

(1,300

)

Net (decrease) increase from cash and cash equivalents

$

(4,580

)

 

6,897

 

$

3,964

 

 

(6,922

)

Cash and cash equivalents - beginning of period

 

129,243

 

 

126,533

 

 

120,699

 

 

140,352

 

Cash and cash equivalents - end of period

$

124,663

 

$

133,430

 

$

124,663

 

$

133,430

 

Enerpac Tool Group Corp.
Supplemental Unaudited Data
Reconciliation of GAAP Measures to Non-GAAP Measures
(In thousands) Fiscal 2022 Fiscal 2023
Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4 TOTAL
Sales
Industrial Tools & Services Segment

$

121,313

 

$

125,940

 

$

140,395

 

$

139,694

 

$

527,342

 

$

127,297

 

$

130,904

 

$

-

$

-

$

258,201

 

Other

 

9,590

 

 

10,659

 

 

11,499

 

 

12,133

 

 

43,881

 

 

12,085

 

 

11,056

 

 

-

 

-

 

23,141

 

Total

$

130,903

 

$

136,599

 

$

151,894

 

$

151,827

 

$

571,223

 

$

139,382

 

$

141,960

 

$

-

$

-

$

281,342

 

 
% Sales Growth
Industrial Tools & Services Segment

 

8

%

 

12

%

 

5

%

 

4

%

 

7

%

 

5

%

 

4

%

 

-

 

-

 

4

%

Other

 

32

%

 

35

%

 

18

%

 

14

%

 

23

%

 

26

%

 

4

%

 

-

 

-

 

14

%

Total

 

10

%

 

13

%

 

6

%

 

4

%

 

8

%

 

6

%

 

4

%

 

-

 

-

 

5

%

 
Operating Profit from Continuing Operations
Operating profit

$

6,407

 

$

4,484

 

$

6,643

 

$

13,125

 

$

30,660

 

$

12,309

 

$

13,972

 

$

-

$

-

$

26,281

 

Impairment & divestiture charges

 

-

 

 

1,116

 

 

-

 

 

1,297

 

 

2,413

 

 

-

 

 

-

 

 

-

 

-

 

-

 

Restructuring charges

 

2,737

 

 

1,832

 

 

517

 

 

3,049

 

 

8,135

 

 

982

 

 

2,987

 

 

-

 

-

 

3,969

 

Gain on sale of facility, net of transaction charges

 

-

 

 

-

 

 

(585

)

 

-

 

 

(585

)

 

-

 

 

-

 

 

-

 

-

 

-

 

Leadership transition charges (benefit) (2)

 

3,759

 

 

1,747

 

 

2,800

 

 

(37

)

 

8,269

 

 

400

 

 

202

 

 

-

 

-

 

603

 

Business review charges

 

-

 

 

2,500

 

 

502

 

 

-

 

 

3,002

 

 

-

 

 

-

 

 

-

 

-

 

-

 

M&A charges

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

196

 

 

-

 

-

 

196

 

ASCEND transformation program charges

 

-

 

 

-

 

 

3,856

 

 

9,760

 

 

13,616

 

 

9,419

 

 

11,372

 

 

-

 

-

 

20,791

 

Adjusted operating profit

$

12,903

 

$

11,679

 

$

13,733

 

$

27,194

 

$

65,510

 

$

23,110

 

$

28,729

 

$

-

$

-

$

51,840

 

 
Adjusted Operating Profit by Segment
Industrial Tools & Services Segment

$

19,646

 

$

15,654

 

$

19,421

 

$

31,878

 

$

86,600

 

$

29,099

 

$

34,836

 

$

-

$

-

$

63,935

 

Other

 

(1,257

)

 

334

 

 

1,017

 

 

1,853

 

 

1,947

 

 

1,424

 

 

1,156

 

 

-

 

-

 

2,580

 

Corporate / General

 

(5,486

)

 

(4,309

)

 

(6,705

)

 

(6,537

)

 

(23,037

)

 

(7,413

)

 

(7,263

)

 

-

 

-

 

(14,675

)

Adjusted operating profit

$

12,903

 

$

11,679

 

$

13,733

 

$

27,194

 

$

65,510

 

$

23,110

 

$

28,729

 

$

-

$

-

$

51,840

 

 
Adjusted Operating Profit %
Industrial Tools & Services Segment

 

16.2

%

 

12.4

%

 

13.8

%

 

22.8

%

 

16.4

%

 

22.9

%

 

26.6

%

 

-

 

-

 

24.8

%

Other

 

-13.1

%

 

3.1

%

 

8.8

%

 

15.3

%

 

4.4

%

 

11.8

%

 

10.5

%

 

-

 

-

 

11.1

%

Adjusted Operating Profit %

 

9.9

%

 

8.5

%

 

9.0

%

 

17.9

%

 

11.5

%

 

16.6

%

 

20.2

%

 

-

 

-

 

18.4

%

 
EBITDA from Continuing Operations (1)
Earnings from continuing operations

$

3,185

 

$

2,121

 

$

4,061

 

$

10,224

 

$

19,591

 

$

6,409

 

$

7,158

 

$

-

$

-

$

13,568

 

Financing costs, net

 

961

 

 

755

 

 

951

 

 

1,719

 

 

4,386

 

 

2,815

 

 

3,105

 

 

-

 

-

 

5,920

 

Income tax expense (benefit)

 

1,781

 

 

1,337

 

 

1,377

 

 

(95

)

 

4,401

 

 

2,383

 

 

2,988

 

 

-

 

-

 

5,370

 

Depreciation & amortization

 

5,175

 

 

4,986

 

 

4,822

 

 

4,617

 

 

19,600

 

 

4,193

 

 

4,226

 

 

-

 

-

 

8,419

 

EBITDA

$

11,102

 

$

9,199

 

$

11,211

 

$

16,465

 

$

47,978

 

$

15,800

 

$

17,477

 

$

-

$

-

$

33,277

 

 
EBITDA from Continuing Operations (1)
EBITDA

$

11,102

 

$

9,199

 

$

11,211

 

$

16,465

 

$

47,978

 

$

15,800

 

$

17,477

 

$

-

$

-

$

33,277

 

Impairment & divestiture charges

 

-

 

 

1,116

 

 

-

 

 

1,297

 

 

2,413

 

 

-

 

 

-

 

 

-

 

-

 

-

 

Restructuring charges

 

2,737

 

 

1,832

 

 

517

 

 

3,049

 

 

8,135

 

 

982

 

 

2,987

 

 

-

 

-

 

3,969

 

Gain on sale of facility, net of transaction charges

 

-

 

 

-

 

 

(585

)

 

-

 

 

(585

)

 

-

 

 

-

 

 

-

 

-

 

-

 

Leadership transition charges (benefit) (2)

 

3,759

 

 

1,747

 

 

2,800

 

 

(37

)

 

8,269

 

 

400

 

 

202

 

 

-

 

-

 

603

 

Business review charges

 

-

 

 

2,500

 

 

502

 

 

-

 

 

3,002

 

 

-

 

 

-

 

 

-

 

-

 

-

 

M&A charges

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

196

 

 

-

 

-

 

196

 

ASCEND transformation program charges

 

-

 

 

-

 

 

3,856

 

 

9,760

 

 

13,616

 

 

9,419

 

 

11,372

 

 

-

 

-

 

20,791

 

Adjusted EBITDA

$

17,598

 

$

16,394

 

$

18,301

 

$

30,534

 

$

82,828

 

$

26,601

 

$

32,234

 

$

-

$

-

$

58,836

 

 
Adjusted EBITDA by Segment
Industrial Tools & Services Segment

$

22,996

 

$

19,260

 

$

22,853

 

$

34,154

 

$

99,263

 

$

31,698

 

$

37,458

 

$

-

$

-

$

69,156

 

Other

 

(263

)

 

1,225

 

 

1,912

 

 

2,741

 

 

5,615

 

 

2,316

 

 

2,050

 

 

-

 

-

 

4,366

 

Corporate / General

 

(5,135

)

 

(4,091

)

 

(6,464

)

 

(6,361

)

 

(22,050

)

 

(7,413

)

 

(7,274

)

 

-

 

-

 

(14,686

)

Adjusted EBITDA

$

17,598

 

$

16,394

 

$

18,301

 

$

30,534

 

$

82,828

 

$

26,601

 

$

32,234

 

$

-

$

-

$

58,836

 

 
Adjusted EBITDA %
Industrial Tools & Services Segment

 

19.0

%

 

15.3

%

 

16.3

%

 

24.4

%

 

18.8

%

 

24.9

%

 

28.6

%

 

-

 

-

 

26.8

%

Other

 

-2.7

%

 

11.5

%

 

16.6

%

 

22.6

%

 

12.8

%

 

19.2

%

 

18.5

%

 

-

 

-

 

18.9

%

Adjusted EBITDA %

 

13.4

%

 

12.0

%

 

12.0

%

 

20.1

%

 

14.5

%

 

19.1

%

 

22.7

%

 

-

 

-

 

20.9

%

 
Notes:
(1) EBITDA represents net earnings from continuing operations before financing costs, net, income tax expense (benefit), and depreciation & amortization. EBITDA is not a calculation based upon GAAP. The amounts included in the EBITDA and Adjusted EBITDA calculation, however, are derived from amounts included in the Condensed Consolidated Statements of Earnings. EBITDA and adjusted EBITDA should not be considered as alternatives to net earnings, operating profit or operating cash flows. The Company has presented EBITDA and adjusted EBITDA because it regularly reviews these performance measures. In addition, EBITDA and adjusted EBITDA are used by many of our investors and lenders, and are presented as a convenience to them. The EBITDA and adjusted EBITDA measures presented may not always be comparable to similarly titled measures reported by other companies due to differences in the components of the calculation.
(2) Caption updated from "Leadership transition & board search charges (benefit)" used during Fiscal 2022, costs included have not been altered.
Enerpac Tool Group Corp.
Supplemental Unaudited Data
Reconciliation of GAAP Measures to Non-GAAP Measures (Continued)
(In thousands, except for per share amounts)
Fiscal 2022 Fiscal 2023
Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4 TOTAL
Adjusted Earnings (3)
Net Earnings

$

2,788

 

$

1,221

 

$

1,643

 

$

10,034

 

$

15,686

 

$

7,453

 

$

4,497

 

$

-

$

-

$

11,950

 

Loss from Discontinued Operations, net of income tax

 

(397

)

 

(900

)

 

(2,418

)

 

(190

)

 

(3,905

)

 

1,044

 

 

(2,661

)

 

-

 

-

 

(1,618

)

Earnings from Continuing Operations

$

3,185

 

$

2,121

 

$

4,061

 

$

10,224

 

$

19,591

 

$

6,409

 

$

7,158

 

$

-

$

-

$

13,568

 

Impairment & divestiture charges

 

-

 

 

1,116

 

 

-

 

 

1,297

 

 

2,413

 

 

-

 

 

-

 

 

-

 

-

 

-

 

Restructuring charges

 

2,737

 

 

1,832

 

 

517

 

 

3,049

 

 

8,135

 

 

982

 

 

2,987

 

 

-

 

-

 

3,969

 

Gain on sale of facility, net of transaction charges

 

-

 

 

-

 

 

(585

)

 

-

 

 

(585

)

 

-

 

 

-

 

 

-

 

-

 

-

 

Leadership transition charges (benefit) (2)

 

3,759

 

 

1,747

 

 

2,800

 

 

(37

)

 

8,269

 

 

400

 

 

202

 

 

-

 

-

 

603

 

Business review charges

 

-

 

 

2,500

 

 

502

 

 

-

 

 

3,002

 

 

-

 

 

-

 

 

-

 

-

 

-

 

ASCEND transformation program charges

 

-

 

 

-

 

 

3,856

 

 

9,760

 

 

13,616

 

 

9,419

 

 

11,372

 

 

-

 

-

 

20,791

 

M&A charges

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

196

 

 

-

 

-

 

196

 

Accelerated debt issuance costs

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

317

 

 

-

 

 

-

 

-

 

317

 

Net tax effect of reconciling items above

 

42

 

 

(805

)

 

(1,366

)

 

(4,162

)

 

(6,291

)

 

(719

)

 

(1,652

)

 

-

 

-

 

(2,371

)

Other income tax (benefit) expense

 

-

 

 

210

 

 

-

 

 

-

 

 

210

 

 

-

 

 

144

 

 

-

 

-

 

144

 

Adjusted Earnings from Continuing Operations

$

9,723

 

$

8,721

 

$

9,785

 

$

20,131

 

$

48,360

 

$

16,808

 

$

20,407

 

$

-

$

-

$

37,217

 

 
Adjusted Diluted Earnings per share (3)
Net Earnings

$

0.05

 

$

0.02

 

$

0.03

 

$

0.17

 

$

0.26

 

$

0.13

 

$

0.08

 

$

-

$

-

$

0.21

 

Loss from Discontinued Operations, net of income tax

 

(0.01

)

 

(0.01

)

 

(0.04

)

 

(0.00

)

 

(0.07

)

 

0.02

 

 

(0.05

)

 

-

 

-

 

(0.03

)

Earnings from Continuing Operations

$

0.05

 

$

0.03

 

$

0.07

 

$

0.18

 

$

0.33

 

$

0.11

 

$

0.12

 

$

-

$

-

$

0.24

 

Impairment & divestiture charges, net of tax effect

 

-

 

 

0.01

 

 

-

 

 

0.02

 

 

0.04

 

 

-

 

 

-

 

 

-

 

-

 

-

 

Restructuring charges, net of tax effect

 

0.04

 

 

0.03

 

 

0.01

 

 

0.04

 

 

0.11

 

 

0.02

 

 

0.05

 

 

-

 

-

 

0.06

 

Gain on sale of facility, net of transaction charges, net of tax effect

 

-

 

 

-

 

 

(0.01

)

 

0.00

 

 

(0.01

)

 

-

 

 

-

 

 

-

 

-

 

-

 

Leadership transition charges (benefit) (2), net of tax effect

 

0.06

 

 

0.03

 

 

0.04

 

 

(0.01

)

 

0.12

 

 

0.01

 

 

0.00

 

 

-

 

-

 

0.01

 

Business review charges, net of tax effect

 

-

 

 

0.04

 

 

0.01

 

 

(0.01

)

 

0.04

 

 

-

 

 

-

 

 

-

 

-

 

-

 

ASCEND transformation program charges, net of tax effect

 

-

 

 

-

 

 

0.05

 

 

0.13

 

 

0.17

 

 

0.15

 

 

0.17

 

 

-

 

-

 

0.33

 

M&A charges, net of tax effect

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

0.00

 

 

-

 

-

 

-

 

Accelerated debt issuance costs, net of tax effect

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

0.01

 

 

0.00

 

 

-

 

-

 

0.01

 

Other income tax (benefit) expense

 

-

 

 

0.00

 

 

-

 

 

-

 

 

-

 

 

-

 

 

0.00

 

 

-

 

-

 

-

 

Adjusted Diluted Earnings per share from Continuing Operations

$

0.16

 

$

0.14

 

$

0.16

 

$

0.35

 

$

0.81

 

$

0.29

 

$

0.35

 

$

-

$

-

$

0.65

 

 
Free Cash Flow (4)
Cash (used in) provided by operating activities

$

(4,726

)

$

9,403

 

$

2,519

 

$

44,540

 

$

51,736

 

$

17,533

 

$

(7,756

)

$

-

$

-

$

9,777

 

Capital expenditures

 

(3,293

)

 

(1,537

)

 

(2,140

)

 

(1,447

)

 

(8,417

)

 

(3,028

)

 

(2,437

)

 

-

 

-

 

(5,465

)

Proceeds from sale of property, plant and equipment

 

133

 

 

30

 

 

995

 

 

18

 

 

1,176

 

 

493

 

 

91

 

 

-

 

-

 

584

 

Other

 

-

 

 

1

 

 

(1

)

 

-

 

 

-

 

 

930

 

 

-

 

 

-

 

-

 

930

 

Free Cash Flow

$

(7,886

)

$

7,897

 

$

1,373

 

$

43,111

 

$

44,495

 

$

15,928

 

$

(10,102

)

$

-

$

-

$

5,826

 

 
Notes continued:
(3) Adjusted earnings from continuing operations and adjusted diluted earnings per share represent net earnings and diluted earnings per share per the Condensed Consolidated Statements of Earnings net of charges or credits for items to be highlighted for comparability purposes. These measures are not calculated based upon generally accepted accounting principles (GAAP) and should not be considered as an alternative to net earnings or diluted earnings per share or as an indicator of the Company's operating performance. However, this presentation is important to investors for understanding the operating results of the current portfolio of Enerpac Tool Group companies.
(4) Free cash flow primarily represents the operating cash flow, proceeds from the sale of property, plant and equipment less capital expenditures.
 
For all reconciliations of GAAP measures to Non-GAAP measures, the summation of the individual components may not equal the total due to rounding. With respect to the earnings per share reconciliations the impact of share dilution on the calculation of the net earnings or loss per share and discontinued operations per share may result in the summation of these components not equaling the total earnings per share from continuing operations.
Enerpac Tool Group Corp.
Supplemental Unaudited Data
Reconciliation of GAAP To Non-GAAP Guidance
(In millions)
Fiscal 2023
Low High
Reconciliation of Continued Operations GAAP Operating Profit
To Adjusted EBITDA
GAAP Operating profit

$

54

 

$

73

 

ASCEND transformation program charges

 

38

 

 

33

 

Restructuring charges

 

9

 

 

7

 

Adjusted operating profit

$

101

 

$

113

 

Other expense, net

 

(1

)

 

(1

)

Depreciation & amortization

 

18

 

 

16

 

Adjusted EBITDA

$

118

 

$

128

 

 
Reconciliation of GAAP Cash Flow From Operations to Free Cash Flow
Cash provided by operating activities

$

65

 

$

85

 

Capital expenditures

 

(10

)

 

(15

)

Other

 

-

 

 

-

 

Free Cash Flow Guidance

$

55

 

$

70

 

 
Notes continued:
(5) Management does not provide guidance on GAAP financial measures as we are unable to predict and estimate with certainty items such as potential impairments, refinancing costs, business divestiture gains/losses, discrete tax adjustments, or other items impacting GAAP financial metrics. As a result, we have included above only those items about which we are aware and are reasonably likely to occur during the guidance period covered.

 

Contacts

Bobbi Belstner

Senior Director, Investor Relations and Strategy

262.293.1912

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