Enerpac (EPAC) Q1 2026 Earnings Call Transcript

Motley Fool Transcribing, The Motley Fool

Thu, December 18, 2025 astatine 8:29 AM CST 24 min read

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Thursday, December 18, 2025 astatine 8:30 a.m. ET

• President and Chief Executive Officer — Paul Sternlieb

• Chief Financial Officer — Darren Kozik

Paul Sternlieb: Thanks, Travis, and bully morning, everyone. For our 2026 results, were fundamentally arsenic expected. And determination were immoderate favorable developments and encouraging trends. In our concern tools and services segment, oregon IT&S, merchandise income grew a steadfast 4% organically, which we judge is simply a reflection of our ongoing quality to summation marketplace stock and outperform our broader concern peers. We saw beardown IT&S merchandise bid maturation for the quarter, expanding our assurance successful the outlook for the year. And arsenic I volition speech astir later, we proceed to put successful the concern to enactment our maturation strategy.

With that, fto maine crook the telephone implicit to Darren who volition supply much item connected our archetypal 4th show arsenic good arsenic geographic and extremity marketplace trends. Darren?

Darren Kozik: Thanks, Paul. Within merchandise revenue, peculiarly successful the UK, turning to descent five, which shows our owed to the timing. Describe arsenic a chaotic paper for fiscal 2026 fixed the underlying economical conditions declined 10%. Again, it's meaningful to abstracted merchandise from services. In EMEA, merchandise gross grew 5%, continued spot from infrastructure and authorities spending and a coagulated show successful Southern year-over-year growth. In the 2nd 4th and for the afloat fiscal year. Turning to Slide six. For 2026, gross nett borderline of 50.7% was successful enactment with our show implicit the past fewer quarters. As expected, margins were affected by higher tariff-driven costs flowing done outgo of goods sold.

However, we were capable to successfully offset these connected a dollar ground done pricing and productivity actions. We expect the borderline unit from tariffs to easiness arsenic we participate 2026. Additionally, we enjoyed a favorable premix displacement wrong the portfolio, which was offset by little work margins. On the selling, general, and administrative line, we were capable to clasp spending fundamentally level year-over-year, offsetting the inflationary interaction from compensation incremental spending and innovation with choky outgo controls. As a result, adjusted EBITDA was $32.4 million, representing a borderline of 22.4%. First 4th adjusted net per stock was $0.36 compared with $0.40 successful the year-ago period. A higher effectual taxation complaint negatively impacted net by 2¢ per share.

Turning to the equilibrium expanse shown connected descent seven, Enerpac's presumption remains highly strong. Net indebtedness was $49 cardinal astatine quarter-end, resulting successful a nett indebtedness to adjusted EBITDA ratio of 0.3. Total liquidity, including availability nether our revolver and currency connected hand, was $539 million. The timing of receipts of payments successful the quarter. Capital expenditures were besides little arsenic the year-ago play included further CapEx for our caller headquarters. Finally, with our balanced superior allocation strategy, we repurchased $15 cardinal of banal successful the archetypal 4th portion we support ample adust pulverization for strategical M&A. Based connected our show successful the archetypal 4th and encouraging trends connected the bid front, we are maintaining our full-year fiscal 2026 guidance.