Zinger Key Points
- Enerpac Tool's Q4 adjusted EPS of $0.50 missed expectations of $0.53, with revenue down 1.2% Y/Y at $158.7 million.
- For FY25, EPAC expects net sales of $610M-$625M and 0%-2% organic growth amid a declining industrial market.
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Enerpac Tool Group Corp. EPAC shares are trading lower after the company reported worse-than-expected fourth-quarter EPS results.
The company reported revenue from continuing operations of $158.7 million, down 1.2% Y/Y and above the consensus of $156.7 million.
Organic sales grew 0.9%, with product sales down 0.8% and service revenues up 9.7%. In the quarter, IT&S reported net sales of $153.4 million, nearly flat year-over-year with a 0.8% rise in organic sales.
Adjusted EBITDA from continuing operations declined to $38.6 million from $40.1 million, with a margin contraction to 24.3% from 24.9% a year ago.
Adjusted EPS from continuing operations of $0.50 missed the consensus of $0.53.
As of August 31, 2024, cash and cash equivalents stood at $167.09 million.
Paul Sternlieb, President & CEO, said, “Moreover, we remained good stewards of capital, investing in our growth strategy – including the September 4, 2024 acquisition of DTA – and returned $40 million to shareholders through our share repurchase program and dividend payments, while reducing our balance sheet leverage.”
Outlook: For FY25, EPAC expects net sales of $610 million-$625 million (vs. consensus of $638.9 million), with organic growth of 0% to 2%, adjusted EBITDA of $150 million-$160 million, and FCF of $89 million-$99 million.
“In setting our guidance for fiscal 2025, we are taking into account an expectation of a continued decline in the general industrial market. However, we believe Enerpac will continue to generate growth in fiscal 2025, representing our ability to outperform the industry and gain share driven by our targeted growth strategy,” added Sternlieb.
The company also announced that Darren Kozik is joining as Executive Vice President and Chief Financial Officer, effective October 28, 2024. Kozik will provide leadership over all aspects of the company’s finance and IT functions globally.
Price Action: EPAC shares are down 6.85% at $40.55 premarket at the last check Wednesday.
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