Enerpac Tool Group Corp. (EPAC) Q1 2026 Earnings Call Transcript

Revenue Enerpac's first quarter revenue of $144 million decreased 1% year-over-year. The decline was attributed to a 3% organic decline in IT&S sales, offset by a 4% increase in product revenue.

Product Revenue Product revenue increased 4% year-over-year. Standard products were up low single digits, and the Heavy Lifting Technology business experienced double-digit growth due to capturing additional applications in the infrastructure end market.

Service Revenue Service revenue declined 26% year-over-year, primarily in the EMEA region, particularly in the U.K., due to lower production and customer consolidation in the oil and gas industry.

Gross Profit Margin Gross profit margin was 50.7%, consistent with recent quarters. Margins were impacted by higher tariff-driven costs, which were offset by pricing and productivity actions. A favorable mix shift was offset by lower service margins.

Adjusted EBITDA Adjusted EBITDA was $32.4 million, representing a margin of 22.4%. This was impacted by flat year-over-year SG&A spending, which offset inflationary compensation and incremental innovation spending.

Adjusted Earnings Per Share (EPS) Adjusted EPS was $0.36, down from $0.40 in the prior year. A higher effective tax rate negatively impacted earnings by $0.02 per share.

Net Debt Net debt was $49 million at quarter end, resulting in a net debt to adjusted EBITDA ratio of 0.3.

Free Cash Flow Free cash flow was $13 million, an increase of $10 million year-over-year. This increase was due to the timing of receipts and payments in the quarter, as well as lower capital expenditures compared to the prior year.