Third Quarter of Fiscal 2023 Continuing
Operations Highlights*
- Net sales were $156 million, with a 4% year-over-year increase
in core sales**; the strengthening of the US dollar reduced sales
by 1% year over year
- GAAP operating margin was 16.3% and adjusted operating margin
was 21.7%
- Adjusted EBITDA margin was 24.0%, up from 12.0% in the
prior-year period
- Record gross profit margins and adjusted EBITDA margins since
the launch of Enerpac Tool Group in 2019
- GAAP diluted earnings per share (“EPS”) was $0.30 and adjusted
diluted EPS was $0.39, an increase of 144% year over year.
- Leverage (Net Debt to Adjusted EBITDA) was 1.0x at May 31,
2023
- Repurchased 0.8 million additional shares for approximately $21
million
- FY23 full-year guidance: Updating revenue to high-end of the
range, and raising adjusted EBITDA
*This news release contains financial measures in accordance
with Generally Accepted Accounting Principles in the United States
(“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. **Core growth
represents organic revenue growth excluding the impact of foreign
exchange rates, acquisitions, and dispositions.
Enerpac Tool Group Corp. (NYSE: EPAC) (the “Company” or
“Enerpac”) today announced results for its fiscal third quarter
ended May 31, 2023.
“We delivered solid performance in the third quarter, driven by
the focused execution of our global team. Once again, we saw
year-over-year core growth in three out of four regions,
highlighted by double digit core growth in Europe and Asia Pacific.
For the second consecutive quarter, we achieved record gross profit
margins and adjusted EBITDA margins since the launch of Enerpac
Tool Group in 2019. In addition, reflecting the Board’s confidence
in management and in alignment with our balanced capital allocation
strategy, we returned approximately $21 million to shareholders
during the quarter through share repurchases under our March 2022
authorization,” said Paul Sternlieb, Enerpac Tool Group’s President
& CEO.
Mr. Sternlieb continued, “We continue working towards further
developing our culture of continuous improvement. We are driving
sustainable improvements to our cost structure, simplifying the
business for efficiency and greater productivity, and enhancing how
we bring products and services to market. While the global
macroeconomic environment remains dynamic, we believe the
structural improvements underway at Enerpac coupled with our
vertical and geographic diversity have us well positioned to
deliver enhanced shareholder value.”
Consolidated
Results from Continuing Operations
(US$ in millions, except per share)
Three Months Ended
Nine Months Ended
May 31, 2023
May 31, 2022
May 31, 2023
May 31, 2022
Net Sales
$156.3
$151.9
$437.6
$419.4
Net Earnings
$17.0
$4.1
$30.5
$9.4
Diluted Earnings Per Share
$0.30
$0.07
$0.53
$0.15
Adjusted Diluted Earnings Per Share
$0.39
$0.16
$1.04
$0.47
Consolidated net sales for the third quarter of fiscal 2023 were
$156.3 million compared to $151.9 million in the prior-year third
quarter. Core sales improved 4% year over year, with product sales
up 9% and service revenues down 13%, as the Company continued its
implementation of 80/20 and a more selective process for quoting
service projects (particularly in the Middle East region) that is
focused on more differentiated solutions. We estimate core sales
growth was negatively impacted by approximately 200 basis points as
a result of the more selective process for quoting in the Middle
East in the third quarter. The impact from foreign currency
exchange rates reduced net sales by 1% in the quarter compared to
the prior year.
Fiscal 2023 third quarter net earnings and diluted earnings per
share were $17.0 million and $0.30, respectively, compared to net
earnings and diluted EPS of $4.1 million and $0.07, respectively,
in the third quarter of fiscal 2022. Fiscal 2023 third quarter net
earnings included:
- Restructuring charges of $2.3 million ($1.8 million, or $0.03
per share, after tax) attributable to ASCEND initiatives;
- ASCEND transformation program charges (“ASCEND charges”) of
$5.9 million ($3.3 million, or $0.06 per share, after tax),
including third-party fees for program implementation support;
- Leadership transition charges of $0.1 million ($0.0 million, or
$0.00 per share, after tax); and
- M&A charges of $0.2 million ($0.1 million, or $0.00 per
share, after tax).
Fiscal 2022 third quarter net earnings included:
- A restructuring charge of $0.5 million ($0.4 million, or $0.01
per share, after tax) attributable to further actions to flatten
and simplify the organizational structure;
- ASCEND charges of $3.9 million ($3.0 million, or $0.05 per
share, after tax) primarily related to the use of external services
for support in the design and development of the program;
- Leadership transition charges of $2.8 million ($2.5 million, or
$0.04 per share, after tax);
- Business review charges of $0.5 million ($0.3 million, or $0.01
per share, after tax) related to external support for the deep dive
business review prior to the launch of ASCEND; and
- A gain on the sale of a facility, net of transaction charges,
of $0.6 million ($0.5 million, or $0.01 per share, after tax)
related to footprint rationalization.
- Excluding the items detailed above, adjusted diluted EPS was
$0.39 for the third quarter of fiscal 2023 compared to $0.16 in the
comparable prior-year period. Fiscal 2022 third quarter results
reflect a $10.8 million increase in receivable reserves ($0.14 per
share, after tax) related to an agent in the MENAC region.
Consolidated net sales for the nine months ended May 31, 2023
were $437.6 million, compared to $419.4 million in the comparable
prior-year period. Core sales increased 7% year over year, while
the impact of foreign currency decreased net sales by 3%.
Net earnings and diluted EPS for the nine months ended May 31,
2023 were $30.5 million and $0.53, respectively, compared to net
earnings and diluted EPS of $9.4 million and $0.15, respectively,
in the comparable prior year period.
Industrial Tools
& Service (IT&S)
(US$ in millions)
Three Months Ended
Nine Months Ended
May 31, 2023
May 31, 2022
May 31, 2023
May 31, 2022
Net Sales
$144.1
$140.4
$402.3
$387.6
Operating Profit
$36.2
$19.2
$93.3
$49.9
Operating Profit %
25.1%
13.7%
23.2%
12.9%
Adjusted Op Profit (1)
$39.8
$19.4
$103.8
$54.7
Adjusted Op Profit % (1)
27.6%
13.8%
25.8%
14.1%
(1) Non-GAAP measure, which excludes
approximately $1.1 million of restructuring charges and $2.5
million of ASCEND charges in the third quarter of fiscal 2023 and
$0.5 million of restructuring charges, $0.1 million of leadership
transition charges, $0.1 million of ASCEND charges and a gain on
sale of a facility, net of transaction charges, of $0.6 million in
the third quarter of fiscal 2022. The nine months ended May 31,
2023 excludes $4.6 million of restructuring charges and $5.8
million of ASCEND charges compared to $3.7 million of restructuring
charges, $1.1 million of impairment & divestiture charges, $0.6
million of leadership transition charges, $0.1 million of ASCEND
charges and a gain on sale of a facility, net of transaction
charges, of $0.6 million in the prior-year period.
Third quarter fiscal 2023 net sales were $144.1 million, 3%
higher than the prior fiscal year’s third quarter net sales. Core
sales increased 4% year over year.
Operating profit margin and adjusted operating profit margin
increased year over year to 25.1% and 27.6%, respectively,
primarily due to the impact of ASCEND initiatives, pricing actions,
and savings from cost management and restructuring initiatives
implemented in prior periods, despite increased material costs.
Third quarter fiscal 2022 adjusted operating profit margin of
13.8% included an unfavorable impact of 770 basis points due to an
additional receivable reserve in the MENAC region.
Corporate Expenses from Continuing
Operations
Corporate expenses were $12.7 million and $13.7 million for the
third quarter of fiscal 2023 and fiscal 2022, respectively.
Adjusted corporate expenses(2) of $7.9 million for the third
quarter of fiscal 2023 were $1.2 million higher than the comparable
prior-year period expense of $6.7 million, primarily due to
increased incentive compensation, partially offset by favorable
health benefit claims and restructuring savings.
(2) Non-GAAP measure which excludes
approximately $1.1 million of restructuring charges, $3.5 million
of ASCEND charges, $0.1 million of leadership transition charges
and $0.2 million of M&A charges in the third quarter of fiscal
2023 compared to $2.7 million of leadership transition charges,
$0.5 million of business review charges and $3.8 million of ASCEND
charges in the third quarter of fiscal 2022.
Balance Sheet and
Leverage
(US$ in millions)
Period Ended
May 31, 2023
February 28, 2023
May 31, 2022
Cash Balance
$142.0
$124.7
$123.7
Debt Balance
$234.7
$209.3
$205.0
Net Debt to Adjusted EBITDA**
1.0
0.9
1.1
Net debt as of May 31, 2023 was approximately $93 million (total
debt of $235 million less $142 million of cash), which increased
approximately $8 million from February 28, 2023. Net Debt to
Adjusted EBITDA from continuing operations was 1.0x as of May 31,
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 success of our ASCEND transformation
program, and our view on the remainder of the fiscal year, we are
updating our expectations for full-year net sales to the high end
of the previously disclosed range at $590-600 million, and we are
increasing our expected adjusted EBITDA range to $123 to $130
million. 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 June
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, 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)
May 31,
August 31,
2023
2022
Assets Current assets Cash and cash equivalents
$
142,001
$
120,699
Accounts receivable, net
103,565
106,747
Inventories, net
93,037
83,672
Other current assets
34,838
31,262
Total current assets
373,441
342,380
Property, plant and equipment, net
41,783
41,372
Goodwill
264,686
257,949
Other intangible assets, net
39,084
41,507
Other long-term assets
74,080
74,104
Total assets
$
793,074
$
757,312
Liabilities and Shareholders' Equity Current
liabilities Trade accounts payable
$
47,151
$
72,524
Accrued compensation and benefits
28,567
21,390
Current maturities of debt
3,125
-
Short-term debt
-
4,000
Income taxes payable
5,982
4,594
Other current liabilities
55,398
50,680
Total current liabilities
140,223
153,188
Long-term debt, net
231,545
200,000
Deferred income taxes
8,226
7,355
Pension and postretirement benefit liabilities
11,492
11,941
Other long-term liabilities
64,969
66,217
Total liabilities
456,455
438,701
Shareholders' equity Capital stock
16,750
16,679
Additional paid-in capital
218,164
212,986
Treasury stock
(763,675
)
(742,844
)
Retained earnings
991,081
966,751
Accumulated other comprehensive loss
(125,701
)
(134,961
)
Stock held in trust
(3,405
)
(3,209
)
Deferred compensation liability
3,405
3,209
Total shareholders' equity
336,619
318,611
Total liabilities and shareholders' equity
$
793,074
$
757,312
Enerpac Tool Group Corp. Condensed Consolidated
Statements of Earnings (In thousands, except per share
amounts) (Unaudited)
Three Months Ended
Nine Months Ended
May 31,
May 31,
May 31,
May 31,
2023
2022
2023
2022
Net sales
$
156,253
$
151,894
$
437,595
$
419,395
Cost of products sold
78,395
79,847
221,464
227,741
Gross profit
77,858
72,047
216,131
191,654
Selling, general and administrative expenses
48,810
63,095
154,116
162,240
Amortization of intangible assets
1,357
1,792
4,075
5,678
Restructuring charges
2,252
517
6,220
5,086
Impairment & divestiture charges
-
-
-
1,116
Operating profit
25,439
6,643
51,720
17,534
Financing costs, net
3,250
951
9,170
2,668
Other expense, net
525
254
1,948
1,004
Earnings before income tax expense
21,664
5,438
40,602
13,862
Income tax expense
4,688
1,377
10,058
4,495
Net earnings from continuing operations
16,976
4,061
30,544
9,367
Loss from discontinued operations, net of income taxes
(4,596
)
(2,418
)
(6,214
)
(3,715
)
Net earnings
$
12,380
$
1,643
$
24,330
$
5,652
Earnings per share from continuing operations Basic
$
0.30
$
0.07
$
0.54
$
0.16
Diluted
0.30
0.07
0.53
0.15
Loss per share from discontinued operations Basic
$
(0.08
)
$
(0.04
)
$
(0.11
)
$
(0.06
)
Diluted
(0.08
)
(0.04
)
(0.11
)
(0.06
)
Earnings per share* Basic
$
0.22
$
0.03
$
0.43
$
0.09
Diluted
0.22
0.03
0.42
0.09
Weighted average common shares outstanding Basic
57,052
60,227
56,993
60,292
Diluted
57,432
60,610
57,417
60,640
*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
Nine Months Ended
May 31,
May 31,
May 31,
May 31,
2023
2022
2023
2022
Operating Activities Cash provided by operating activities -
continuing operations
$
16,602
$
2,274
$
24,561
$
7,515
Cash provided by (used in) operating activities - discontinued
operations
652
245
2,470
(319
)
Cash provided by operating activities
$
17,254
$
2,519
$
27,031
$
7,196
Investing Activities Capital expenditures
(2,926
)
(2,140
)
(8,391
)
(6,970
)
Proceeds from sale of property, plant and equipment
11
995
595
1,158
Cash used in investing activities - continuing operations
$
(2,915
)
$
(1,145
)
$
(7,796
)
$
(5,812
)
Cash used in investing activities
$
(2,915
)
$
(1,145
)
$
(7,796
)
$
(5,812
)
Financing Activities Borrowings on revolving credit
facility
26,000
30,000
60,000
45,000
Principal repayments on revolving credit facility
-
-
(24,000
)
(15,000
)
Principal repayments on term loan
(625
)
-
(625
)
-
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
-
-
(2,486
)
-
Purchase of treasury shares
(20,831
)
(36,295
)
(20,831
)
(36,295
)
Stock options, taxes paid related to the net share settlement of
equity awards & other
(8
)
62
(1,461
)
(3,161
)
Payment of cash dividend
-
-
(2,274
)
(2,409
)
Cash provided by (used in) financing activities - continuing
operations
$
4,536
$
(6,233
)
$
4,323
$
(11,865
)
Cash provided by (used in) financing activities
$
4,536
$
(6,233
)
$
4,323
$
(11,865
)
Effect of exchange rate changes on cash
(1,537
)
(4,866
)
(2,256
)
(6,166
)
Net increase (decrease) from cash and cash equivalents
$
17,338
$
(9,725
)
$
21,302
$
(16,647
)
Cash and cash equivalents - beginning of period
124,663
133,430
120,699
140,352
Cash and cash equivalents - end of period
$
142,001
$
123,705
$
142,001
$
123,705
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
$
144,126
$
-
$
402,327
Other
9,590
10,659
11,499
12,133
43,881
12,085
11,056
12,127
-
35,268
Total
$
130,903
$
136,599
$
151,894
$
151,827
$
571,223
$
139,382
$
141,960
$
156,253
$
-
$
437,595
% Sales Growth Industrial Tools &
Services Segment
8
%
12
%
5
%
4
%
7
%
5
%
4
%
3
%
-
4
%
Other
32
%
35
%
18
%
14
%
23
%
26
%
4
%
5
%
-
11
%
Total
10
%
13
%
6
%
4
%
8
%
6
%
4
%
3
%
-
4
%
Adjusted Operating Profit from Continuing
Operations Operating profit
$
6,407
$
4,484
$
6,643
$
13,125
$
30,660
$
12,309
$
13,972
$
25,439
$
-
$
51,720
Impairment & divestiture charges
-
1,116
-
1,297
2,413
-
-
-
-
-
Restructuring charges
2,737
1,832
517
3,049
8,135
982
2,987
2,252
-
6,220
Gain on sale of facility, net of transaction charges
-
-
(585
)
-
(585
)
-
-
-
-
-
Leadership transition charges (benefit) (1)
3,759
1,747
2,800
(37
)
8,269
400
202
90
-
693
Business review charges
-
2,500
502
-
3,002
-
-
-
-
-
M&A charges
-
-
-
-
-
-
196
166
-
362
ASCEND transformation program charges
-
-
3,856
9,760
13,616
9,419
11,372
5,947
-
26,738
Adjusted operating profit
$
12,903
$
11,679
$
13,733
$
27,194
$
65,510
$
23,110
$
28,729
$
33,894
$
-
$
85,733
Adjusted Operating Profit by Segment
Industrial Tools & Services Segment
$
19,646
$
15,654
$
19,421
$
31,878
$
86,600
$
29,099
$
34,836
$
39,814
$
-
$
103,749
Other
(1,257
)
334
1,017
1,853
1,947
1,424
1,156
1,965
-
4,545
Corporate / General
(5,486
)
(4,309
)
(6,705
)
(6,537
)
(23,037
)
(7,413
)
(7,263
)
(7,885
)
-
(22,561
)
Adjusted operating profit
$
12,903
$
11,679
$
13,733
$
27,194
$
65,510
$
23,110
$
28,729
$
33,894
$
-
$
85,733
Adjusted Operating Profit % Industrial
Tools & Services Segment
16.2
%
12.4
%
13.8
%
22.8
%
16.4
%
22.9
%
26.6
%
27.6
%
-
25.8
%
Other
-13.1
%
3.1
%
8.8
%
15.3
%
4.4
%
11.8
%
10.5
%
16.2
%
-
12.9
%
Adjusted Operating Profit %
9.9
%
8.5
%
9.0
%
17.9
%
11.5
%
16.6
%
20.2
%
21.7
%
-
19.6
%
EBITDA from Continuing Operations (2)
Earnings from continuing operations
$
3,185
$
2,121
$
4,061
$
10,224
$
19,591
$
6,409
$
7,158
$
16,976
$
-
$
30,544
Financing costs, net
961
755
951
1,719
4,386
2,815
3,105
3,250
-
9,170
Income tax expense (benefit)
1,781
1,337
1,377
(95
)
4,401
2,383
2,988
4,688
-
10,058
Depreciation & amortization
5,175
4,986
4,822
4,617
19,600
4,193
4,226
4,084
-
12,503
EBITDA
$
11,102
$
9,199
$
11,211
$
16,465
$
47,978
$
15,800
$
17,477
$
28,998
$
-
$
62,275
Adjusted EBITDA from Continuing Operations (2)
EBITDA
$
11,102
$
9,199
$
11,211
$
16,465
$
47,978
$
15,800
$
17,477
$
28,998
$
-
$
62,275
Impairment & divestiture charges
-
1,116
-
1,297
2,413
-
-
-
-
-
Restructuring charges
2,737
1,832
517
3,049
8,135
982
2,987
2,252
-
6,220
Gain on sale of facility, net of transaction charges
-
-
(585
)
-
(585
)
-
-
-
-
-
Leadership transition charges (benefit) (1)
3,759
1,747
2,800
(37
)
8,269
400
202
90
-
693
Business review charges
-
2,500
502
-
3,002
-
-
-
-
-
M&A charges
-
-
-
-
-
-
196
166
-
362
ASCEND transformation program charges
-
-
3,856
9,760
13,616
9,419
11,372
5,947
-
26,738
Adjusted EBITDA
$
17,598
$
16,394
$
18,301
$
30,534
$
82,828
$
26,601
$
32,234
$
37,453
$
-
$
96,288
Adjusted EBITDA by Segment Industrial
Tools & Services Segment
$
22,996
$
19,260
$
22,853
$
34,154
$
99,263
$
31,698
$
37,458
$
42,525
$
-
$
111,681
Other
(263
)
1,225
1,912
2,741
5,615
2,316
2,050
2,855
-
7,222
Corporate / General
(5,135
)
(4,091
)
(6,464
)
(6,361
)
(22,050
)
(7,413
)
(7,274
)
(7,927
)
-
(22,615
)
Adjusted EBITDA
$
17,598
$
16,394
$
18,301
$
30,534
$
82,828
$
26,601
$
32,234
$
37,453
$
-
$
96,288
Adjusted EBITDA % Industrial Tools
& Services Segment
19.0
%
15.3
%
16.3
%
24.4
%
18.8
%
24.9
%
28.6
%
29.5
%
-
27.8
%
Other
-2.7
%
11.5
%
16.6
%
22.6
%
12.8
%
19.2
%
18.5
%
23.5
%
-
20.5
%
Adjusted EBITDA %
13.4
%
12.0
%
12.0
%
20.1
%
14.5
%
19.1
%
22.7
%
24.0
%
-
22.0
%
Notes: (1) Caption updated from "Leadership
transition & board search charges (benefit)" used during Fiscal
2022, costs included have not been altered. (2) EBITDA represents
net earnings from continuing operations before financing costs,
net, income tax expense (benefit), and depreciation &
amortization. Neither EBITDA nor adjusted EBITDA are calculated
based upon generally accepted accounting principles ("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.
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
$
12,380
$
-
$
24,330
Loss from Discontinued Operations, net of income tax
(397
)
(900
)
(2,418
)
(190
)
(3,905
)
1,044
(2,661
)
(4,596
)
-
(6,214
)
Earnings from Continuing Operations
$
3,185
$
2,121
$
4,061
$
10,224
$
19,591
$
6,409
$
7,158
$
16,976
$
-
$
30,544
Impairment & divestiture charges
-
1,116
-
1,297
2,413
-
-
-
-
-
Restructuring charges
2,737
1,832
517
3,049
8,135
982
2,987
2,252
-
6,220
Gain on sale of facility, net of transaction charges
-
-
(585
)
-
(585
)
-
-
-
-
-
Leadership transition charges (benefit) (1)
3,759
1,747
2,800
(37
)
8,269
400
202
90
-
693
Business review charges
-
2,500
502
-
3,002
-
-
-
-
-
ASCEND transformation program charges
-
-
3,856
9,760
13,616
9,419
11,372
5,947
-
26,738
M&A charges
-
-
-
-
-
-
196
166
-
362
Accelerated debt issuance costs
-
-
-
-
-
317
-
-
-
317
Net tax effect of reconciling items above
42
(805
)
(1,366
)
(4,162
)
(6,291
)
(719
)
(1,652
)
(3,197
)
-
(5,568
)
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
$
22,234
$
-
$
59,450
Adjusted Diluted Earnings per share (3)
Net Earnings
$
0.05
$
0.02
$
0.03
$
0.17
$
0.26
$
0.13
$
0.08
$
0.22
$
-
$
0.42
Loss from Discontinued Operations, net of income tax
(0.01
)
(0.01
)
(0.04
)
(0.00
)
(0.07
)
0.02
(0.05
)
(0.08
)
-
(0.11
)
Earnings from Continuing Operations
$
0.05
$
0.03
$
0.07
$
0.18
$
0.33
$
0.11
$
0.12
$
0.30
$
-
$
0.53
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
0.03
-
0.10
Gain on sale of facility, net of transaction charges, net of tax
effect
-
-
(0.01
)
0.00
(0.01
)
-
-
-
-
-
Leadership transition charges (benefit) (1), net of tax effect
0.06
0.03
0.04
(0.01
)
0.12
0.01
0.00
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
0.06
-
0.38
M&A charges, net of tax effect
-
-
-
-
-
-
0.00
0.00
-
0.01
Accelerated debt issuance costs, net of tax effect
-
-
-
-
-
0.01
0.00
0.00
-
0.00
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
$
0.39
$
-
$
1.04
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
)
$
17,254
$
-
$
27,031
Capital expenditures
(3,293
)
(1,537
)
(2,140
)
(1,447
)
(8,417
)
(3,028
)
(2,437
)
(2,926
)
-
(8,391
)
Proceeds from sale of property, plant and equipment
133
30
995
18
1,176
493
91
11
-
595
Other
-
1
(1
)
-
-
930
-
43
-
973
Free Cash Flow
$
(7,886
)
$
7,897
$
1,373
$
43,111
$
44,495
$
15,928
$
(10,102
)
$
14,382
$
-
$
20,208
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 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 (5) GAAP Operating profit
$
60
$
74
ASCEND transformation program charges
38
33
Restructuring charges
9
7
Adjusted operating profit
$
107
$
114
Other expense, net
(1
)
(1
)
Depreciation & amortization
17
17
Adjusted EBITDA
$
123
$
130
Reconciliation of GAAP Cash Flow From Operations to Free
Cash Flow (5) Cash provided by operating activities
$
65
$
90
Capital expenditures
(10
)
(15
)
Other
-
-
Free Cash Flow Guidance
$
55
$
75
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230621855018/en/
Travis Williams Director of Investor Relations 262.293.1913
Enerpac Tool (NYSE:EPAC)
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