Tool Company Enerpac Maintains Cautious Tone Regarding FY24 Despite Q1 Beat: Here's Why

Enerpac Tool Group Corp EPAC reported Q1 FY24 revenue from continuing operations of $142 million, up 1.9% Y/Y, beating the consensus of $137.9 million. 

Organic sales grew 5.5%, with product sales up 4.2% and service revenues up 10.1% Y/Y.

Adjusted EBITDA rose 31% Y/Y to $34.9 million, with a margin expansion of 550 basis points Y/Y to 24.6%.

Adjusted EPS of $0.39 beat the consensus of $0.32.

As of November 30, 2023, cash and equivalents stood at $148.0 million. Net cash used by operating activities was $6.7 million versus $17.5 million of cash provided by operations in the prior-year period. 

The company purchased about shares worth $26 million in the first quarter under its share repurchase program announced in March 2022.

Paul Sternlieb, President & CEO said, "While we maintain a cautious tone regarding full-year results, given economic and geopolitical uncertainty, our performance demonstrates the continued benefits of Enerpac's ASCEND transformation program, four-pillar growth strategy, and the permanent changes across the organization that are making Enerpac more efficient, more productive, and easier to do business with."

Outlook: For FY24, EPAC reiterated guidance for net sales of $590 million-$605 million (consensus: $603.1 million), with core growth of about 2%-4%, adjusted EBITDA within $142 million-$152 million, and FCF of $60 million-$70 million. 

Price Action: EPAC shares closed higher by 1.78% at $30.28 on Tuesday.

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