Q3 FY24 Earnings
June 25, 2024
1
Forward-Looking Statements
and Non-GAAP Measures
Statements made in this presentation that are not historical are forward-looking statements made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. The terms "outlook," "guidance," "may," "should, ""could," "anticipate," "believe," "estimate," "expect," "objective," "plan," "project" and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are subject to inherent risks and uncertainties that may cause actual results or events to differ materially from those contemplated by such forward-looking statements. Risks and uncertainties, that may cause actual results or events to differ materially from those contemplated by such forward- looking statements include, without limitation, general economic uncertainty, market conditions in the industrial, oil & gas, energy, power generation, infrastructure, commercial construction, truck and automotive industries, the impact of geopolitical activity, including the invasion of Ukraine by Russia and international sanctions imposed in response thereto, as well as the armed conflict involving Hamas and Israel, the ability of the Company to achieve its plans or objectives related to its growth strategy, market acceptance of existing and new products, market acceptance of price increases, successful integration of acquisitions, the impact of dispositions and restructurings, the ability of the Company to continue to achieve its objectives related to the ASCEND program, including any assumptions underlying its calculation of expected incremental operating profit or program investment, operating margin risk due to competitive pricing and operating efficiencies, supply chain risk, risks related to reliance on independent agents and distributors for the distribution and service of products, material, labor, or overhead cost increases, tax law changes, foreign currency risk, interest rate risk, commodity risk, tariffs, litigation matters, impairment of goodwill or other intangible assets, the Company's ability to access capital markets and other risks and uncertainties that may be referred to or noted in the Company's reports filed with the Securities and Exchange Commission from time to time, including those described in the Company's Form 10-K for the fiscal year ended August 31, 2023 and most recent report on Form 10-Q. Enerpac Tool Group disclaims any obligation to publicly update or revise any forward-looking statements as a result of new information, future events or any other reason. All estimates of future performance are as of June 24, 2024.
This presentation also contains financial measures that are not measures presented in conformity with GAAP. These non-GAAP measures include organic sales, EBITDA from continuing operations, adjusted EBITDA from continuing operations, adjusted earnings from continuing operations, adjusted diluted earnings per share from continuing operations, adjusted operating profit from continuing operations, segment adjusted operating profit and adjusted EBITDA, adjusted SG&A, and net debt. The supplemental financial schedules appended at the end of this presentation include reconciliations of these non-GAAP measures to the most comparable GAAP measure. Enerpac Tool Group acknowledges that there are many items that impact a company's reported results and the adjustments reflected in these non-GAAP measures are not intended to present all items that may have impacted these results. In addition, these non-GAAP measures are not necessarily comparable to similarly titled measures used by other companies.
2
Advancing Enerpac's
Corporate Strategy
3
Q3 FY24 Results
($ in millions) | |||
Net Sales | Net Sales | Organic | |
3Q23 | 3Q24 | Growth* | |
Industrial Tools & Service (IT&S) | $144 | $146 | +1.8% |
IT&S Product | $118 | $118 | +0.5% |
IT&S Service | $26 | $28 | +7.3% |
Other | ** | $12 | $4 | -14.2% |
Enerpac Tool Group | $156 | $150 | +1.2% |
*Organic net sales is a non-GAAP measure and excludes the impact of foreign exchange rates, acquisitions, and dispositions identified in the accompanying reconciliations to GAAP measures. | |
**3Q23 Other segment included revenues from the divested Cortland Industrial. | 4 |
Continued Operational and SG&A Efficiency Gains
Gross Profit Margin
51.8%
49.8%
3Q23 | 3Q24 |
SG&A % | Adjusted SG&A %* |
32.7% | |||
29.1% | |||
27.5% | 27.0% | ||
3Q23 | 3Q24 | 3Q23 | 3Q24 |
*Adjusted SG&A expense is a non-GAAP measure and excludes restructuring and other charges identified in the accompanying reconciliations to GAAP measures.
5
Driving EBITDA & Margin Expansion
($ in millions)
Adjusted EBITDA* | Adjusted EBITDA Margin* |
$40
$37
26.4%
24.0%
3Q23 | 3Q24 | 3Q23 | 3Q24 |
*Adjusted EBITDA and adjusted EBITDA margin are non-GAAP measures and exclude restructuring and other charges identified in the accompanying reconciliations to GAAP measures.
6
Year-to-Date Gains
Organic Growth* | +2.8% |
IT&S Organic Growth | +3.4% |
Adjusted EBITDA** | +13.1% |
Adjusted EBITDA Margin | 25.3% (+330 bps) |
Free Cash Flow | +66% |
*Organic net sales is a non-GAAP measure and excludes the impact of foreign exchange rates, acquisitions, and dispositions identified in the accompanying reconciliations to GAAP measures. | ||
**Adjusted EBITDA and adjusted EBITDA margin are non-GAAP measures and exclude restructuring and other charges identified in the accompanying reconciliations to GAAP measures. | 7 | |
The Company calculates free cash flow as cash from operations less capital expenditures. | ||
Strong Liquidity &
Balance Sheet
($ in millions)
Cash & Equivalents | $132 |
Revolver Capacity (Undrawn) | $399 |
Total Liquidity | $531 |
Total Debt | $196 |
Net Debt/Adj. EBITDA* | 0.5x |
Asset-Light Model Enables Strong FCF**
$78
$69
$54$52
$42$44
$12 | $8 | $9 | ||||
FY21 | FY22 | FY23 |
Balanced Capital
Allocation Strategy
Invest in Ourselves | Disciplined M&A |
Investments in Digital, Product
Innovation, R&D, Operational
Excellence Improvements
Maintain Our Strong | Opportunistically |
Balance Sheet | Returning Capital |
Target Leverage of | to Shareholders |
1.5x - 2.5x | ~3M shares remaining on |
current 10M share | |
repurchase authorization |
*As of May 31, 2024, calculated in accordance with the terms of the Company's September 2022 senior credit facility. | 8 | |
**The Company calculates free cash flow as cash from operations less capital expenditures. | ||
Tightening
FY24 Guidance
Key Assumptions:
- Targeting to outperform industry and gain market share
- No broad-based global recession
Depreciation & Amortization ~$13 - $15M | |
Interest Expense | ~$14 - $16M |
Adjusted Tax Rate | ~20 - 25% |
Cash Taxes | ~$22 - $24M |
Capex | ~$8 - $13M |
ASCEND Costs | ~$10 - $15M* |
Key FX Rates | $1.08/1€, $1.25/1£ |
N E T S A L E S
$585 - $590M
~2-3% Organic Growth (previously ~2-4%)
A D J . E B I T D A
$147 - $150M
Previously $142-$152M
F R E E C A S H F L O W
$60 - $70M
*ASCEND costs of $10-$15 million are inclusive of $3-$5 million from restructuring
9
IT&S Organic Growth by Region*
Region | 3Q23 | 3Q24 |
FY23 IT&S
Regional Sales
APAC
14%
Americas
46%
EMEA
39%
*Organic net sales is a non-GAAP measure and excludes the impact of foreign exchange rates, acquisitions, and dispositions. | 10 |
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Enerpac Tool Group Corporation published this content on 25 June 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 June 2024 12:25:18 UTC.