Enerpac Tool (EPAC) 19 Dec 242025 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to Enerpac Tool Group's First Quarter Fiscal 2025 Earnings Conference Call.

As a reminder, this conference is being recorded, December 19, 2024. It is now my pleasure to turn the conference over to Travis Williams, Senior Director of Investor Relations. Please go ahead, Mr. Williams.

operator. you, Thank thank Group's and joining for us Good Quarter you Fiscal Tool First XXXX Enerpac morning, for Earnings Call.

today reference recording the on will call also and and On made available Paul of company's today's call Officer. The call can to on section company's today's on the which Relations the you the available and results slides Sternlieb, referenced President Kozik, Chief Darren of download Officer; website. Today's are Executive Chief non-GAAP call will Financial present our Investor website follow measures. along. A be are

can to yesterday. the You find measures a GAAP reconciliation issued non-GAAP release of press in

noted Our comments filings. our business results to cause latest will subject actual also matters include to be that Those in are that different. could statements SEC risks materially forward-looking include risks

to turn Paul. will I it Now over

production to Thanks, X morning. good first CFO earnings call. Darren like as him and been welcome months on switching team. And persistently a of you We for beyond. thrilled is fiscal very enter Enerpac to our macro the Travis, quarter and and and board see to up quickly. mindful on We're speed on sluggish PMI industrial manufacturing as can He's to evidenced XXXX nearly have to industrial weak Slide environment by his X. I'd coming continued the trends now

Tools believe outperform cost were improvement global our Biomedical. geographic operational and aligns While due growth challenging we with conditions. in the other the actively macro leadership, monitoring short we ensure at continue we productivity. In Enerpac strategy, light Cortland business in saw Enerpac's conditions, & can market process given to and targeted brand report our to the to pleased continuous Overall, efficiency Services term business global situation, the costs Industrial sales structure are of customer-driven enhance to decline our and innovation region of Americas these market growth regions X we a to across

a enable will financial the enhance over the detailed longer-term quarter. I'll in also I on strategy a which We us the our that basis, to elaborate profitability in to turn to a on performance have moment. In to meantime, continue to speak Darren call will

Thanks, Paul.

included As seen comprised Enerpac's of in the we of the decrease volume. revenue X.X% later decline increase integration September with of the our in in a X.X% Paul quarter quarter IT&S XXXX. revenue regional in a full revenue than more will increased progress At $X first DTA, product and $X speak the revenue million performance increased quarter Slide an from a in solid in first X, X.X% we made X% a business, organic about revenue million X. nearly slight for delivered in The acquisition quarter, order In the by offset sales. organic total was call. Results sales year-over-year on in service and on X% decline in sales. closed

are DTA Europe We DTA our and network. Enerpac's Therefore, benefits by are business, combination HLT expand Lifting leveraging global reported full with Cortland or revenue increase year-over-year Other a EUR a of another year of XXXX expectation X.X%. of million from growth DTA. At our quarter in we Technology, about we as the excited maintaining Biomedical, sales of growth sales Heavy XX generated of expect we segment, commercial our beyond with

XX% despite DTA, SG&A margins at to of to flat base. overall Enerpac's our cost a revenue service due year-over-year the ability of to Americas, at Gross lower higher inclusion to accretive of XX percentage and points a return held sales reflecting normalized our the basis in remains X. was to declined Turning This XX.X%. Slide margin profit revenue to which Cortland, performance. Adjusted manage primarily

the gross first closely in XXX the basis DTA. quarter Adjusted due and environment. EBITDA inclusion discussed points margins the second continue will margin the monitor to given the in We to declined costs of of quarter XXXX

Adjusted period, with XXXX XX% The earnings year X% compared of $X.XX with year-ago the effective for increase. in first XX.X% ago in the share at per nearly a compared flat were period. the tax quarter $X.XX rate was

balance extremely $XX strong. free flow million. remains adjusted liquidity on end the Turning EBITDA shown debt $XX Slide $XXX quarter. in first X. X.Xx sheet, resulting cash debt Enerpac's the million, at of the improved to compensation a of have about the position was company. was to leverage our In offset the the net more Net the increased quarter, than of earnings relocation. remain we'll from as very benefits higher period and the headquarter year incentive excited move and lower upcoming for that the result CapEx prior net payments related million annual which We Total

the As turn it back our to to have we continue we let well for M&A deploy as with investments opportunistic to that, and needed leverage, our capital coupled by share to continued me performance region. current disciplined internal our strategy capacity repurchases. With commercial generate discuss as cash, Paul

in revenue we on performance Germany nuclear. market remained by region, our petrochemical EMEA see generation, Asia in which Slide a We region. the enjoyed the tough are power to to In wind return pleased mid-single economies we against and seen the in in to outlook despite positive sales gain as growth growth basis, in were pressures in the encouraged geographic macro of France, particularly the X Pacific which a are array continued largest given On projects X, bright strong, our Darren. the year-over-year generate particular comparisons with and a a region, strength Thanks, by in digits. pipeline. Service markets year-over-year an also with the of driven

industry, conditions is solid due region in mainly trends. soft, experiencing depressed be the to continues mining the of Australia the rest While to

our results anticipate Asia which the cautious, in full largest market, environment the the our growth remains the to Americas, Pacific continue reflected we quarter. region. is in year, For In this

or new were we're customers that we a of from cautiously the standard our products policies quarter in in wait-and-see gains battery-powered HLT our create While Tool clarity to market a products, Heavy posture. With including the on Torque we will pumps inventories more line, Wrenches, interest Battery of are in administration Technology and pullers. favorable direction environment sticking the demand a sales seeing months. with optimistic positive services, hydraulic Lifting are Industrial line rates in weaker our enjoying coming and of the meantime, In many to the response new and

to continue our focus we Commercial management, addition, sales funnel In on ECX. utilizing or Enerpac Excellence,

second of posted remains year-over-year revenue benefit with For quarter, new generate the year to consecutive products. track Cortland growth growth the the on full for several and

profitable quarter, standardization ensuring Overall, Enerpac we Turning we're practices to and focused will best processes and margin our improvement Slide PEP, our further organization. simplification consistently Last program of across propel are the Powering Performance or capturing continuous introduced goal growth improvement. of continued and applied on which X.

Let some specific opportunities. me drill down on

activity Kaizen side. is our On and facilities, rationalization, on most we significant gross profit sourcing engineering just increasing perhaps name a to value line, the the ongoing near-term several lean conversion levers, SKU including our few. opportunity have in and But

supply cost, who our and quality fewer reductions Under in buying able our our start are to X,XXX further with partners effectively been we've support goal Vice X,XXX supply program leverage delivery. and to new the more in can needs our our our XXXX, Enerpac strategic drive spend ASCEND suppliers. we XX/XX, for reduce to our Sourcing base. sourcing the power and base and the President that and At best was sourcing application most of the the initiative, to rationalizing of focus is of today, optimizing supply than and Through than provide

expense On the being progress of as of tremendous our revenue. we've SG&A line, a made toward goal already percent best-in-class

XXX by reduced a Over we've approximately sales the percent of as past SG&A X basis adjusted fiscal years, points.

IT the And President strategy, plans XXXX opportunities and to pursue beyond. For Vice people we is to been be challenges Darren's of reflection we action and processes. strategy next example, shared Global and yet we the performance managing a additional Conference. another environment. benefit scores, to take derived held of pleased our asset announced of moving simplify, of which and Moreover, to to the happy experience Eric human regions offshore deep believe conduct certain functions was automate see to that, we operations including year Enerpac's Leadership a a our We're functions. But of Darren has evaluate is fiscal on to we'd have Executive the which opportunity I a we recent a embarking standardize finance, operations. Since and just now ultimately service improving review a organization. With key center leadership, of right employee rounding generate will engagement and offshoring succeed Chack, culture of questions. from our as add have processing growth have great were our and we in additions in out be labor and and the that embraced tremendous across in is any optimize significant Operations, the believe lower-cost phase, key start. Annual resource our This transactional I of winning

comes Tom first King. CL the Your Instructions] from question of [Operator Hayes line of

I I when the you guidance, that called anything saw but weaker results? bit as it maybe you fourth continues just the be pretty out quarter expected, quarter wondering, just I XQ Paul, and weak. in positive had the don't was a in did guys you we was little wondering, obviously, environment provide today, you play generally quarterly spoke out and besides strong industrial is obviously, think to

Yes. question, the Thanks Tom. for

it the we pretty call, expected, I we of as out remarks we think knew environment seeing. comp 'XX, we're I frankly. as the was a obviously, that just tougher our on and mean, mentioned QX lapping fiscal in it much played

to in suspected we more a be here challenging So QX. it was little bit certainly going

the optimism. of we at optimistic new in I the and line and are X, just, things think some also frankly, into latest, I'd partners this Our from what of given customers translate expect year on and the fair what a has of call week orders. the our call hear rest I the about we that referenced say, think for expectations certainly, our terms 'XX. built But the into and voice top calendar in are people for that last to research guidance or potential even customer of our in I around just I'll policies of essentially point, mean, demand better relatively ultimately administration we're to new performance. And amount there's, it, channel hopeful

really us. for yes, essentially out So as played expected -- QX but

Great. And offshoot mentioned of bit that. you an kind of a that little

a guys? make and China thoughts early here Mexico, on you for in I you talk good administration potential talk the tariffs, but tariffs percentage and in impact change the think any of U.S., products With the any our of of with the

Yes, U.S., sure. in our in global here We actually a the make is we do Wisconsin. largest are facility -- manufacturer, but

when to any of impact the new say So I position think, Enerpac it generally a or speaking, tariffs. impact in is potential relatively -- probably I'd comes favorable of

perspective, China reference, a U.S. for products on a imports that Just are for Mexico represents imported value. estimate into from I then the into components negligible. And our million of U.S. than and and from Canada less direct basis, China us the from $XX would

it's we're ago. did So in Trump we certainly X, with administration effectively something able but to the deal not years deal first something with

I also think a perspective sourcing we've got dual a with from needed. if that a price work that's cost playbook from to good perspective, and certainly

say So value it's I but us. nothing, that hugely wouldn't given dollar for it's not impactful

Maybe challenging bit it. front. little a more. or a Germany. EMEA. I up on digits hear Appreciate one Okay. two Kind see we geographic on continue about wondering, just environment, gears in shifting was Happy I low the mean, especially single to the the business to of

one called I as of segments. larger think your out you

the outperforming other to of any kind you Just market there. color seem be

performance. EMEA You say your on thoughts

data gain -- Yes. there. I confidence, And France. But QX, we in market that macro even mean, relatively continuing been the mean Germany conditions we to We see here do versus are in performance stronger QX we be and can in believe think a certainly performance had continue more EMEA have Americas. think we in we good referenced, I the I and are more challenging as with in to pleased. the particularly recently. we I degree share good

people some the are the on effect made, of growth changes great commercial our which leadership key region, the in and there. Just of based having we've strategies execution strategies, our

made we've product new in our of again, frankly, seeing And Some with the think of some that we're the region. changes, I commercially. process success the rollout

tougher the So EMEA macro a we're in seeing pleased, we're would progress again, environment. even, that with in I say,

Okay. just on Maybe services business, Appreciate of a question. the lastly it. X-part kind

think guess, thoughts or or organic And on good you kind on overall a you more get margin? attribute of business. out growth margins. I those any product -- continue up as to but I a company-wide in got is if I do drivers Just that? that it apologize drag put a out there services pathway just I You year-over-year a that of wrong, Appreciate to maybe the to one, what to? called two, call it.

Yes. No, absolutely.

yes, outperforming seen surprising. from services service more And short I our more product scheduled here linked outpace service would maintenance investments. in say, sometimes perspective. a certainly the I opposed mean, think because business hugely work of growth of it a in as probably some have can I can to So is tied, product we project be to not -- term, regularly kind or that revenue CapEx

does So think I bit tend the see offset business. in and some more service the the time from weaknesses be helps product business to of steady a time to we

fleet business a margin it about gains margin we assets a on pretty growth longer customers manpower we'd specialty perspective performing is for while or service there businesses expect be on term, speaking. service, we're where we good to where hydro utilizing just player just half of strategy assets. at customers. however, is type in the that space, we revenue. our labor our us. But Over other on focused is work business a still are growth essentially run primarily have rates, service for you feelings premium to And service About to say the product their rental on of that of that side And are that sites tend half still labor outpaced out as the a recall, product of tools and in X-pillar I'd -- under we practically our brand a share to see continue on product may of From business. the XX% the the execute

continued lines do we operational a execution service path the part in offer to continue focus gains, more I'd and differentiation certainly does of So that tend dilutive. But the that continue project generally so we'll margin in that efficiency also, our to say, service we improve some you or East And But we continue the business, recall, think may in of quality, service make we opportunistically. kinds said to Middle pursue continued region. margin ago, margins And of kinds business to look and on margin be levers particularly I region. lower through actually that on through see that, effectively service, still to having but opportunity of business for away improvement we to that year walk choice see at service. in from active did relatively as a lower XX/XX probably an overall

question William next Sparenblek the line comes Your from Ross of of Blair.

Apologies, I was on mute.

quarter but Forgive me, in seeing on anything kind within and globally? maybe pricing the I U.S. what more missed it, of you're the

Yes. Sure.

a thumb, evaluating positioning. mean, our as I So price we're general always rule of

as generally, an to both year our be know, any positioned. we're the from of still, space. to price market player But competitors recover inflationary time, or either typically over behaved a to increases observer we -- be our what recover costs in space in increases And you monitor As at pretty in leader monitor behavioral a for are continue we'll around marketplace. speaking, aspect times or norm X of we X in to a premium digits, the where region we the that of kind It's environment in typically in what's the we EMEA folks the to at for I'd be just the very we data. And of within remind price say, the period premium of least the low January. fact, we is us. see, actually we but follow the in will and generally look see effective can price And happening tend that's inflationary see would announced a and beginning take tend most we our that in Americas certainly, single we is typical and I that we see that. to

Do increases can't give it's remember. price warranted, guys Okay. intra-year you if I

through environment, we've Clearly, mitigate do and as those can at would more price that taking if certainly XXXX. if Yes. actions. feel or pricing seen into into look we I past evaluate other where we We we that the have appropriately don't would mean we come incremental inflationary than one effectively go tariffs more in we other certainly tariffs warranted. actions if play, certainly increase,

more a it chatter spending timing Okay. second early couple up, there's the U.S. lot in of like seems here. are infrastructure activity, A picking calling for about project the dependent. companies half

to look So maybe to just lead restocking the anything times were hearing on if greenfield like what activity? we from you're and your an distributors see acceleration in expectations start for

what's of databases But ways know, of on of design of for you need of pipe. mean, is activity civil Enerpac subscribe really out we And indication say once are I Yes. show mean kind life and up fair as good the necessarily they to indications coming kind materialized putting the together. pieces really the down we kind start I'd meaningful to us job us favorable. see cetera. up. the site, sort give bidded we materials that of participates and certainly hasn't it see do the work yet, the being think engineering a of et with end in underway, back and picking projects some cycle, proprietary the that pretty I I amount

of indications the early or processes. of sort Some procurement

think we So the be over haven't here for Again, will I that materialize much will do a continue be that the so believe think does seen favorable. several in Enerpac tailwind U.S. we well nice bode next and to that We years.

actually Although of Asia U.S., decent projects I'd a of parts say the including and infrastructure Pac. Europe in outside relatively we seen have

think competitive products, I projects, I high do at well goods any perspective, a get to levels, are this well our able mean, date kind I times appropriate we're as Enerpac these that we what pretty you pretty point monitor that's time. as So closely. think have finished channel. maintain the -- runners, at overall. Certainly, good an at those for but I in address being indications. here we We're and our time issue we lead think And standard typically We think there And that we've on we largely given of to wouldn't seen of runway in from lead positioned.

sense And for of you but XX Awesome. That's the lastly great can just to X, a give are priorities maybe into role, then impressions. what the Darren. in months? months your us coming X any initial hear. And

It's great start. It's significant Ross. a I question. meeting investors, Milwaukee. been thanks, obviously, well shareholders as started, of team great extended a No, in a amount Yes. leadership as

So over culture first it's X Enerpac. feel, weeks, a the especially of the got great for

the a As of I've finally, the in is itself big as fantastic it's at we that and power win. of that for the pricing a culture his we Enerpac win can It's continuous the alluded drive brand, can the just the we I embeds seeing any comments, And the a in team market. second we mindset can say think organization. And Paul of been observation here, improvement markets, play kind would in in company. it's benefit have. team to We a one

we're to So and going operate, going we're to win.

Welcome working with forward to We the Okay. team. look to you.

Steve Your Argus from line the question comes Research. Silver next of of

the could some just quarter. whether return -- context there of I'm APAC to of core growth or in softness implementation Great was whether the growth return some growth the given it among continuous see in was strategy? that soft brand to second this mining, to a what products the return the drove provide whether terms of benefit to curious in you

Yes.

we Asia good we of scale, was well. growth our countries Pac. some saw mean, pretty good soft, the sector. in still is performance above, other we was that, mining that business and was HLT due broad-based certainly, operate of actually areas the is where the and it to think just year-over-year. challenging we It product, the referenced I saw our as Australia But more beyond in on both it Steve. I Most with core all market

the some We've second second on and confidence And here. overall, and built progress, to got behind the good overall adding that increasing So up fiscal cover of good some distributors broad-based. think a continue rest brand. our we to brand continue the pretty on feel to brand, also think, we definitely region about gives that marketing focus year I date. in we channel go increased effort for is Certainly, on into we where I get network are it us we that. drive multiyear was made as partners, with brand additional commercial that. awareness, execute the to have to That the incremental the Obviously, but to team second progress,

Great.

or in of so guys the you going improving but these investing a stage programs where where around overall, strategies, those you business, be of efficiency I the see towards And yourselves digital the kind just at know all transformation on any this yourself Can same you it goal? PEP whether are initiatives? have time, early within put of a lot guys context you it's of the guys strategies. probably of or like working within in lot ECX terms

Yes. mean for really us, Steve. it's evergreen I

we As ASCEND is of built mechanism, I in continuation about, is we're ASCEND PEP over the the although formally effective adjusting really, out PEP. and is costs, we call the machine And day-to-day through that onetime essentially not ASCEND. talked

we multiyear transformation going have kind the et Certainly, XX even initiatives under a forward. margin efficiency of the sustainable adjusted effectively see guidance, did we 'XX. bps opportunity, same the a and that's XX% margin P&L. Ultimately, driving our and same midpoint in that another this internally them DTA, to from organic to into say financial initiatives, sure driving there, enabling exclude to growth continued you do our that day categorize see staff and year, we've built program at of drives effectively, tracking EBITDA essentially, impact ahead current track language all and we the these In essentially guidance of margin for productivity to our if cetera, to we fact, in we more the year through framework expansion business. target make and ASCEND But use this office us they're of of fiscal perspective, plan more the margin to got a we of our day and

So we're Commercial see that, implementation also Enerpac into extending ECX extending or we're expect see continue PEP. it from Excellence. we do I right? commercial of like to benefits to and the And mean tools

mentioned, we rolling here out process rolled through Americas in fiscal the that region we're the in in we 'XX, in the previously As and region out ECX of fiscal EMEA now 'XX.

just, process of that's So ethos here at and part continuous our Enerpac. improvement again,

Great. And and then reception one going in the to that's vertical the last the one, how combining DTA horizontal of, integration capabilities guess, marketplace acquisition, if listing of I terms The technologies. now the I may. from both curious as just the combined around

to as how the is the integration? in curious messaging being days early of received Just the

this can Yes, From taking functioning its roots integration working of we big, and we move horizontally, together. from things that taking well. got the the of And moving year, perspective, in a as excited Europe. performing business then I'll that. parts of that big in player back our We're where We've years. they've now been vertically, things office Europe an outside move wherewithal some of that that about a take team can future last couple promise both commercial a commercially, holds

future. for performing and very which holding quarter, very, to holding the were to well is it the So expectation, Orders it's for in very the strong we're is the a great us. sign promise,

very for add, that Enerpac and playbook. Also, commercial our rolled with how points. clear just built I DTA. initial we across out would We on I growth commercial have network. leads qualify Darren's identify to a agree And And Yes. they're

happening a the commercial premise acquisition. which So really of initial I'm the by the lead well. that progress playing that's Enerpac was to part -- be certainly the our behind of thesis seems the made encouraged network, out days generation we've through investment big there, Early

on Great. challenging And the some markets. in congratulations execution

our CEO, will conference That Paul, now the closing turn to back I for concludes session. the Q&A remarks. over

January Investor Okay. and this for on a the Securities at We Year. morning. Well, Thank season see hope best Annual us on Water Pump, Symposium CJS New for Conference and holiday be and the XX XX Annual thanks wonderful you February and Gabelli again wishes Enerpac Valve upcoming New joining a Happy in you, presenting there. to will York.

This concludes today's call. conference

may You disconnect. now