Enerpac Tool Group Corp. (NYSE: EPAC) has released its financial results for the third quarter of fiscal 2024, ending May 31, 2024. The company reported net sales of $150 million, representing a 4% decline year-over-year due to the disposition of Cortland Industrial. However, organic sales increased by 1.2% year-over-year. The gross margin expanded by 200 basis points to 51.8%, and the operating margin was 22.2%, with adjusted operating margin at 24.6%.
Net earnings for the quarter were $23 million, or $0.41 per share, while adjusted net earnings were $26 million, or $0.47 per share. Adjusted EBITDA increased by 6% year-over-year to $40 million, with an adjusted EBITDA margin of 26.4%, marking an expansion of 240 basis points year-over-year.
For the nine months ended May 31, 2024, net sales amounted to $430.8 million, and operating profit reached $91.5 million, a significant increase from the $51.7 million reported for the same period in the previous year.
The Industrial Tools & Service (IT&S) segment reported net sales of $145.9 million for the third quarter of fiscal 2024, showing a 1.3% increase year-over-year with an operating profit margin of 28.1%. Adjusted operating profit margin for the segment improved to 29.9%, reflecting a 230 basis point increase.
In terms of balance sheet and leverage, the company's cash balance stood at $132.4 million, and the debt balance was reported at $195.7 million. The net debt to adjusted EBITDA ratio was 0.5x on May 31, 2024, a decrease from 1.0x in the prior year.
Looking ahead, the company has narrowed its fiscal 2024 guidance, projecting organic sales growth of approximately 2% to 3% and a net sales range of $585 million to $590 million. The adjusted EBITDA guidance has been increased to a range of $147 million to $150 million, while free cash flow guidance remains unchanged at $60 million to $70 million.
Enerpac Tool Group's president & CEO, Paul Sternlieb, expressed satisfaction with the company's progress and stated, "Enerpac’s continued success across our strategic and operational initiatives is supporting our growth and profitability objectives and advancing our position as a premier industrial solutions provider."
An investor conference call is scheduled for 7:30 am CT on June 25, 2024, where the company will discuss these financial results.
Following these announcements, the company's shares moved 0.3%, and are now trading at a price of $38.6. If you want to know more, read the company's complete 8-K report here.
