Q2 2026 Enerpac Tool Group Corp Earnings Call Transcript
Key Points
- Enerpac Tool Group Corp (EPAC) reported a 6% organic growth in product sales within the Industrial Tools & Service segment, marking the highest growth in 10 quarters.
- The company secured a five-year contract with a major oil and gas company in the UK North Sea, valued at several million dollars annually.
- Enerpac Tool Group Corp (EPAC) exhibited strong performance in the Americas with a 4% growth, driven by nearly 6% growth in product sales.
- The Cortland segment achieved exceptional growth of 27% in the second quarter due to successful new project generation.
- Enerpac Tool Group Corp (EPAC) maintained a strong balance sheet with a net debt to adjusted EBITDA ratio of 0.6x and total liquidity of $499 million.
- Service revenue declined by 17%, impacting overall growth despite gains in product sales.
- Gross margins declined by 410 basis points year-over-year, primarily due to lower volume in the service business.
- The EMEA region experienced a 21% decline in service revenue, affecting overall results despite a 7% increase in product revenue.
- The company faces ongoing pressure in the service business, particularly in the EMEA region, leading to restructuring and headcount reductions.
- The evolving conflict in the Middle East poses potential risks to the business, with approximately 10% of total revenue coming from the region.
Hello, and welcome to Enerpac Tool Group second quarter fiscal 2026, earnings call. Please note that this call is being recorded. (Operator Instructions)
I'd now like to hand the call over to Darren Kozik, CFO. Please go ahead.
Thank you, operator. Good morning and thank you for joining us for Enerpac Tool Group's earnings call for the second quarter of fiscal 2026. Joining me on the call today is our President and Chief Executive Officer; Paul Sternlieb. The slides referenced on today's call are available on the Investor Relations section of the company's website, which you can download and follow along. A recording of today's call will also be made available on our website.
Today's call will reference non-GAAP measures. You can find a reconciliation of GAAP to non-GAAP measures in the press release issued yesterday. Our comments will also include forward-looking statements that are subject to business risks, that could cause
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