On October 15, 2024, Enerpac Tool Group Corp (EPAC, Financial) released its 8-K filing detailing its fiscal 2024 and fourth-quarter financial results. Enerpac Tool Group, a leader in high-precision tools and controlled-force products, operates through two segments: industrial tools and services and other. The company generates revenue primarily from product sales and services, with the United States being its largest market.
Performance Overview
Enerpac Tool Group Corp reported net sales of $590 million for fiscal 2024, a slight decline of 1.5% year-over-year, but achieved organic growth of 2.2%. The company's gross margin expanded by 180 basis points to 51.1%, reflecting improved pricing actions and a favorable sales mix. Despite the challenging macro-environment, Enerpac's net earnings surged by 53% to $82 million, with adjusted net earnings reaching $95 million, marking a 14% increase.
Financial Achievements and Challenges
The company's fiscal 2024 diluted EPS was $1.50, missing the annual estimate of $1.63, while adjusted diluted EPS was $1.72. Enerpac's adjusted EBITDA rose by 8% to $147 million, with an adjusted EBITDA margin of 25.0%, up 220 basis points. However, net sales for the fourth quarter were $159 million, slightly above the analyst estimate of $156.70 million, reflecting a 1.2% year-over-year decline.
Income Statement and Key Metrics
Enerpac's operating profit for fiscal 2024 increased by 45% to $121.6 million, with an operating margin of 20.6%. Adjusted operating profit rose by 11% to $136.7 million, with an adjusted operating margin of 23.2%. The company's cash from operations was $81 million, with a free cash flow of $70 million, highlighting its strong cash generation capabilities.
| Metric | Fiscal 2024 | Fiscal 2023 |
|---|---|---|
| Net Sales | $589.5 million | $598.2 million |
| Operating Profit | $121.6 million | $83.9 million |
| Net Earnings | $82.2 million | $53.6 million |
| Diluted EPS | $1.50 | $0.94 |
Balance Sheet and Cash Flow
Enerpac's balance sheet remains robust, with a cash balance of $167.1 million and a debt balance of $194.5 million as of August 31, 2024. The company's net debt to adjusted EBITDA ratio improved to 0.2x, indicating strong financial health and reduced leverage. Enerpac returned $38 million to shareholders through share repurchases and $2 million in dividend payments.
Analysis and Outlook
Enerpac Tool Group Corp's performance in fiscal 2024 demonstrates resilience in a challenging industrial market. The company's ability to expand margins and generate strong cash flow positions it well for future growth. However, the slight decline in net sales and the challenging macroeconomic environment remain areas of concern. Enerpac's strategic focus on productivity and efficiency gains, along with its recent acquisition of DTA, are expected to drive future growth.
In what remains a challenging macro-environment for the general industrial marketplace, Enerpac continued to achieve organic growth in fiscal 2024," said Paul Sternlieb, Enerpac Tool Group’s President & CEO.
Enerpac's fiscal 2025 outlook anticipates net sales growth of 3% to 6%, with adjusted EBITDA projected between $150 million and $160 million. The company's strategic initiatives and focus on operational excellence are expected to support its growth trajectory in the coming year.
Explore the complete 8-K earnings release (here) from Enerpac Tool Group Corp for further details.
