8-K
ENERPAC TOOL GROUP CORP (EPAC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): September 29, 2021
ENERPAC TOOL GROUP CORP
(Exact name of Registrant, as specified in its charter)
| Wisconsin | 001-11288 | 39-0168610 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
N86 W12500 WESTBROOK CROSSING
MENOMONEE FALLS, Wisconsin 53051
Mailing address: P.O. Box 3241, Milwaukee, Wisconsin 53201
(Address of principal executive offices) (Zip code)
Registrant’s telephone number, including area code: (262) 293-1500
Former name or address, if changed since last report:
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Class A Common Stock, par value $0.20 per share | EPAC | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
The information set forth in this Item 2.02 of this Current Report on Form 8-K and in Exhibit 99.1 is intended to be “furnished” under Item 2.02 of Form 8-K. Such information shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
On September 29, 2021, Enerpac Tool Group Corp. (the “Company”) announced its results of operations for the fourth quarter ended August 31, 2021. A copy of the press release announcing the Company's results for the fourth quarter ended August 31, 2021 is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
99.1 Press Release of the Company dated September 29, 2021.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: September 29, 2021
| ENERPAC TOOL GROUP CORP. | |
|---|---|
| By: | /s/ Fabrizio Rasetti |
| Fabrizio Rasetti | |
| Executive Vice President, General Counsel and | |
| Secretary | |
| Exhibit 99.1 | |
| --- |
Enerpac Tool Group Reports Fourth Quarter Fiscal 2021 Results and Provides Guidance for Fiscal 2022
Fourth Quarter of Fiscal 2021 Highlights*
- Net sales from continuing operations were $145 million in the fourth quarter of fiscal 2021, slightly lower than expectations due to continued supply chain challenges, logistics constraints and COVID related lockdowns, compared to $111 million in the comparable prior year period. - Consolidated core sales for the quarter increased 28% year over year, with consolidated product sales increasing 23% and service sales increasing 55%. Foreign currency benefited net sales by 3%. - Generated cash flow from operations of $29 million in the quarter ended August 31, 2021 compared to $13 million in the fourth quarter of fiscal 2020. Free cash flow was $27 million in the quarter compared to $10 million in the quarter ended August 31, 2020. Full year free cash flow conversion for the year ended August 31, 2021 was well over 100%, a significant increase compared to fiscal 2020. - GAAP operating margin from continuing operations was 9.3% for the fourth quarter of fiscal 2021 versus 2.9% in the comparable prior year quarter. Adjusted operating margin from continuing operations was 13.2% and 4.2% for the quarters ended August 31, 2021 and 2020, respectively. - Net income from continuing operations was $6.5 million compared to $0.2 million in the prior year comparable period. - Adjusted EBITDA margin from continuing operations was 16.6% in the fourth quarter of fiscal 2021 compared to 9.4% in the fourth quarter of fiscal 2020. - Achieved year-over-year incremental adjusted EBITDA margins of 44%, excluding the impact of foreign currency, at the high-end of our target incremental margin range of 35-45%. - GAAP diluted earnings per share (“EPS”) from continuing operations was $0.11 in the fourth quarter of fiscal 2021 compared to $0.00 in the prior year comparable period. Adjusted diluted EPS from continuing operations was $0.19 in the fourth quarter of fiscal 2021 compared to $0.02 in the fourth quarter of fiscal 2020. - Leverage (Net Debt to Adjusted EBITDA) was 0.6x at August 31, 2021 compared to 1.1x at May 31, 2021. - In a separate release, announced retirement of Randy Baker, President & CEO, and the appointment of Paul Sternlieb as his successor effective October 8^th^, 2021. *This news release contains financial measures in accordance with US Generally Accepted Accounting Principles (“GAAP”) in addition to non-GAAP financial measures. Reconciliations of the GAAP to non-GAAP historical financial measures can be found in the tables accompanying this release. Incremental (or decremental) Adjusted EBITDA margin is equivalent to the change in Adjusted EBITDA divided by the change in Net Sales for the comparable periods.
MILWAUKEE--(BUSINESS WIRE)--September 29, 2021--Enerpac Tool Group Corp. (NYSE: EPAC) (the “Company”) today announced results for its fiscal fourth quarter ended August 31, 2021.
“As we closed out this fiscal year, we continued our recovery from the global pandemic, with fourth quarter product sales nearing pre-COVID levels and IT&S product order rates for the quarter comparable to the fourth quarter of 2019. We are pleased to achieve EBITDA margin improvement over fiscal 2019 levels as a result of the structural cost actions we have taken. While we continued to face certain supply chain and other COVID-19-related challenges in the fourth quarter, we are encouraged by the continued strength in many of the vertical markets that we serve and the ongoing positive sentiment of our distributors,” said Randy Baker, Enerpac Tool Group’s President & CEO. “Moving into fiscal 2022, we remain focused on the safety of our employees, supporting our customers, and profitably growing Enerpac Tool Group through organic opportunities, new product development and acquisitions to enhance shareholder value.”
Mr. Baker added, “I want to thank our employees for their hard work and dedication through the extraordinary circumstances we faced throughout the year. Between the on-going challenges associated with the COVID-19 pandemic and the more recent supply chain and logistics challenges resulting from the global economic recovery, our team continues to rise to the challenge to support our customers. We are confident that our business is well positioned for growth as the markets we serve continue to recover from COVID-19 related shutdowns.”
| Consolidated Results from Continuing Operations | |||
|---|---|---|---|
| (US in millions, except per share) | |||
| Twelve Months Ended | |||
| August 31, 2020 | August 31, 2021 | August 31, 2020 | |
| Net Sales | $111.4 | $528.7 | $493.3 |
| Net Income | $0.2 | $40.2 | $5.6 |
| Earnings Per Share | $0.00 | $0.67 | $0.09 |
| Adjusted Diluted Earnings Per Share | $0.02 | $0.63 | $0.18 |
All values are in US Dollars.
- Consolidated net sales from continuing operations for the fourth quarter were $145.4 million compared to $111.4 million in the prior year fourth quarter. Core sales improved 28% year over year, with product sales up 23% and service up 55%. The impact of foreign currency increased net sales by 3%.
- Fiscal 2021 fourth quarter GAAP net income from continuing operations and diluted earnings per share from continuing operations were $6.5 million and $0.11, respectively, compared to net income from continuing operations and diluted EPS of $0.2 million and $0.00, respectively, in the fourth quarter of fiscal 2020. Fiscal 2021 fourth quarter net income from continuing operations included an impairment & divestiture charge of $5.7 million ($5.1 million, or $0.08 per share, after tax) attributable to the Other segment.
- Fiscal 2020 fourth quarter net income from continuing operations included an impairment & divestiture charge of $0.4 million ($0.2 million, or $0.00 per share, after tax); restructuring charges of $1.0 million ($0.8 million, or $0.01 per share, after tax), primarily related to the restructuring plan announced in March 2020 to reduce redundant segment and corporate costs; a pension curtailment benefit of $0.8 million ($0.6 million, or $0.01 per share, after tax); and accelerated debt issuance costs of $1.0 million ($0.8 million, or $0.01 per share, after tax) related to the early redemption of the Company’s 5.625% Senior Notes due 2022 in June 2020.
- Excluding the items detailed above, adjusted diluted EPS from continuing operations was $0.19 for the fourth quarter of fiscal 2021 compared to $0.02 in the comparable prior year period.
- Consolidated net sales for the twelve months ended August 31, 2021 were $528.7 million, compared to $493.3 million for the comparable prior year period. Core sales were up 5% year over year. The impact of foreign currency benefited year-over-year net sales by 2%.
- Consolidated net income from continuing operations and diluted EPS from continuing operations for the twelve months ended August 31, 2021 were $40.2 million and $0.67, respectively, compared to net income from continuing operations and diluted EPS from continuing operations of $5.6 million and $0.09, respectively, in the comparable prior year period.
| Industrial Tools & Services (IT&S) | |||
|---|---|---|---|
| (US in millions) | |||
| Twelve Months Ended | |||
| August 31, 2020 | August 31, 2021 | August 31, 2020 | |
| Sales | $103.0 | $493.1 | $454.9 |
| Operating Profit | $11.3 | $81.7 | $65.5 |
| Adjusted Op Profit (1) | $12.2 | $84.3 | $67.3 |
| Adjusted Op Profit % (1) | 11.8% | 17.1% | 14.8% |
All values are in US Dollars.
| ^(1)^Excludes $0.1 million of restructuring benefit in the fourth quarter of fiscal 2021 compared to $0.5 million of restructuring charges and $0.4 million of<br> impairment & divestiture charges in the fourth quarter of fiscal 2020. The twelve months ended August 31, 2021 excludes $2.1 million of restructuring charges and $0.5 million of net impairment & divestiture charges compared to<br> $4.5 million of restructuring charges, $3.2 million of net impairment & divestiture gains and $0.4 million of purchase accounting charges in the twelve months ended August 31, 2020. |
|---|
- Fourth quarter fiscal 2021 net sales were $134.8 million, 31% higher than the prior fiscal year’s fourth quarter net sales. Core sales increased 28% year over year, with the impact of foreign currency increasing net sales by 3%.
- The increase in revenue is attributable to the broad-based market recovery, as our largest regions of the world returned to more normalized levels of activity.
- Adjusted operating profit margin of 19.9% in the quarter increased year over year primarily due to increased sales volume and savings from cost management and restructuring initiatives implemented in prior periods, despite increased material and freight costs.
Corporate Expenses and Income Taxes (excluding non-GAAP adjustments)
- Corporate expenses from continuing operations of $6.5 million for the fourth quarter of fiscal 2021 were $0.4 million higher than the comparable prior year period, primarily resulting from higher equity compensation, insurance and consulting costs.
- The fiscal 2021 fourth quarter effective income tax rate from continuing operations of approximately 36% was lower than the fourth quarter fiscal 2020 rate of approximately 51%.
Discontinued Operations
Discontinued operations represent operating results for the divested EC&S segment through the October 31, 2019 completion date of the divestiture, as well as impacts from certain retained liabilities subsequent to the completion date.
| Balance Sheet and Leverage | ||
|---|---|---|
| (US in millions) | ||
| May 31, 2021 | August 31, 2020 | |
| Cash Balance | $136.3 | $152.2 |
| Debt Balance | $195.0 | $255.0 |
| Net Debt to Adjusted EBITDA** | 1.1 | 1.8 |
All values are in US Dollars.
Net debt at August 31, 2021 was approximately $35 million (total debt of $175 million less $140 million of cash), which decreased approximately $24 million from the prior quarter. Net Debt to Adjusted EBITDA from continuing operations was 0.6x at August 31, 2021.
**Calculated in accordance with the terms of the Company’s March 2019 Senior Credit Facility
Outlook
Mr. Baker continued, “As we look ahead to the next fiscal year, we are encouraged by our strong backlog, resulting from solid order rates in the fourth quarter. While our largest regions showed encouraging levels of product recovery in the quarter, not all were back to pre-COVID levels. Supply chain constraints, increased commodity costs, logistical shortages, as well as continued slow recovery in certain regions, are expected to create headwinds into fiscal 2022. We anticipate sales to be in the range of $590 million to $610 million for full year fiscal 2022, with the return of our more typical quarterly seasonality. Incremental Adjusted EBITDA margins are expected to be 35% to 45% for the full year, excluding the impact of currency.”
CEO Transition
In a separate press release issued today, the Company announced the retirement of Randy Baker as President & CEO and announced the appointment of Paul Sternlieb as President & CEO, both effective October 8, 2021.
Mr. Baker concluded, “It has been an honor to be the President & CEO of this organization for the past 5 years. We have accomplished a significant transformation of the business in a short period of time. The business is on the path to becoming a best-in-class industrial tools and services company and I am confident that under Paul’s leadership as the new CEO of Enerpac Tool Group, the Company will continue to execute on key initiatives and drive shareholder value.”
Conference Call Information
An investor conference call is scheduled for 10:00 am CT today, September 29, 2021. Webcast information and conference call materials are available on the Enerpac Tool Group company website (www.enerpactoolgroup.com).
Safe Harbor Statement
Certain of the above comments represent forward-looking statements made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. Management cautions that these statements are based on current estimates of future performance and are highly dependent upon a variety of factors, which could cause actual results to differ from these estimates. Among other risks and uncertainties, Enerpac Tool Group’s results are subject to risks and uncertainties arising from general economic conditions, supply chain risk, material and labor cost increases, the COVID-19 pandemic, including the impact of the pandemic or related government responses on the Company’s business, the businesses of the Company’s customers and vendors, and employee mobility, and whether site-specific health and safety concerns related to COVID-19 might require operations to be halted for some period of time, volatile oil pricing, variation in demand from customers, the impact of geopolitical activity on the economy, continued market acceptance of the Company’s new product introductions, the successful integration of acquisitions, the impact of restructurings, operating margin risk due to competitive pricing and operating efficiencies, tax law changes, foreign currency fluctuations and interest rate risk. See the Company’s Form 10-K for the fiscal year ended August 31, 2020 filed with the Securities and Exchange Commission for further information regarding risk factors. 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.
Non-GAAP Financial Information
This press release contains financial measures that are not measures presented in conformity with GAAP. These non-GAAP measures include EBITDA from continuing operations, adjusted EBITDA from continuing operations, adjusted earnings (loss) from continuing operations, adjusted diluted earnings (loss) per share from continuing operations, adjusted operating profit from continuing operations, segment adjusted operating profit and net debt. This press release includes reconciliations of historical non-GAAP measures to the most comparable GAAP measure, including in the tables attached to this press release. This press release does not include a quantitative reconciliation of non-GAAP measures presented for any future period as such a reconciliation is not practicable. Such future-period measures are presented in a manner consistent with the presentation thereof for historical periods. Management believes the non-GAAP measures presented in this press release are commonly used financial measures for investors to evaluate Enerpac Tool Group’s operating performance and financial position with respect to the periods presented and, when read in conjunction with the condensed consolidated financial statements, present a useful tool to evaluate ongoing operations and provide investors with metrics they can use to evaluate aspects of the Company’s performance from period to period. In addition, these are some of the financial metrics management uses in internal evaluations of the overall performance of the Company’s business. Management 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.
About Enerpac Tool Group
Enerpac Tool Group Corp. is a premier industrial tools and services company serving a broad and diverse set of customers in more than 100 countries. The Company’s businesses are global leaders in high pressure hydraulic tools, controlled force products and solutions for precise positioning of heavy loads that help customers safely and reliably tackle some of the most challenging jobs around the world. The Company was founded in 1910 and is headquartered in Menomonee Falls, Wisconsin. Enerpac Tool Group common stock trades on the NYSE under the symbol EPAC. For further information on Enerpac Tool Group and its businesses, visit the Company's website at www.enerpactoolgroup.com.
(tables follow)
| Enerpac Tool Group Corp. | ||||||
|---|---|---|---|---|---|---|
| Condensed Consolidated Balance Sheets | ||||||
| (Dollars in thousands) | ||||||
| (Unaudited) | ||||||
| August 31, | August 31, | |||||
| 2021 | 2020 | |||||
| Assets | ||||||
| Current assets | ||||||
| Cash and cash equivalents | $ | 140,352 | $ | 152,170 | ||
| Accounts receivable, net | 103,233 | 84,170 | ||||
| Inventories, net | 75,347 | 69,171 | ||||
| Other current assets | 38,503 | 35,621 | ||||
| Total current assets | 357,435 | 341,132 | ||||
| Property, plant and equipment, net | 48,590 | 61,405 | ||||
| Goodwill | 277,593 | 281,154 | ||||
| Other intangible assets, net | 54,545 | 62,382 | ||||
| Other long-term assets | 82,084 | 78,221 | ||||
| Total assets | $ | 820,247 | $ | 824,294 | ||
| Liabilities and Shareholders' Equity | ||||||
| Current liabilities | ||||||
| Trade accounts payable | $ | 61,958 | $ | 45,069 | ||
| Accrued compensation and benefits | 21,597 | 17,793 | ||||
| Income taxes payable | 5,674 | 1,937 | ||||
| Other current liabilities | 45,535 | 40,723 | ||||
| Total current liabilities | 134,764 | 105,522 | ||||
| Long-term debt, net | 175,000 | 255,000 | ||||
| Deferred income taxes | 4,397 | 1,708 | ||||
| Pension and postretirement benefit liabilities | 17,783 | 20,190 | ||||
| Other long-term liabilities | 76,105 | 82,648 | ||||
| Total liabilities | 408,049 | 465,068 | ||||
| Shareholders' equity | ||||||
| Capital stock | 16,604 | 16,519 | ||||
| Additional paid-in capital | 202,971 | 193,492 | ||||
| Treasury stock | (667,732 | ) | (667,732 | ) | ||
| Retained earnings | 953,339 | 917,671 | ||||
| Accumulated other comprehensive loss | (92,984 | ) | (100,724 | ) | ||
| Stock held in trust | (3,067 | ) | (2,562 | ) | ||
| Deferred compensation liability | 3,067 | 2,562 | ||||
| Total shareholders' equity | 412,198 | 359,226 | ||||
| Total liabilities and shareholders' equity | $ | 820,247 | $ | 824,294 |
| Enerpac Tool Group Corp. | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Condensed Consolidated Statements of Operations | ||||||||||||
| (Dollars in thousands, except per share amounts) | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||
| August 31, | August 31, | August 31, | August 31, | |||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Net sales | $ | 145,427 | $ | 111,353 | $ | 528,660 | $ | 493,292 | ||||
| Cost of products sold | 79,158 | 66,888 | 285,504 | 276,099 | ||||||||
| Gross profit | 66,269 | 44,465 | 243,156 | 217,193 | ||||||||
| Selling, general and administrative expenses | 45,215 | 37,672 | 175,277 | 180,513 | ||||||||
| Amortization of intangible assets | 1,843 | 2,156 | 8,176 | 8,323 | ||||||||
| Restructuring (benefit) charges | (37 | ) | 987 | 2,392 | 7,335 | |||||||
| Impairment & divestiture charges (benefit) | 5,659 | 408 | 6,198 | (3,159 | ) | |||||||
| Operating profit | 13,589 | 3,242 | 51,113 | 24,181 | ||||||||
| Financing costs, net | 870 | 3,307 | 5,266 | 19,218 | ||||||||
| Other expense (income), net | 275 | (1,205 | ) | 1,872 | (2,886 | ) | ||||||
| Earnings before income tax expense | 12,444 | 1,140 | 43,975 | 7,849 | ||||||||
| Income tax expense | 5,895 | 943 | 3,763 | 2,292 | ||||||||
| Net earnings from continuing operations | 6,549 | 197 | 40,212 | 5,557 | ||||||||
| (Loss) earnings from discontinued operations, net of income taxes | (1,283 | ) | 1,242 | (2,135 | ) | (4,834 | ) | |||||
| Net earnings | $ | 5,266 | $ | 1,439 | $ | 38,077 | $ | 723 | ||||
| Earnings per share from continuing operations | ||||||||||||
| Basic | $ | 0.11 | $ | 0.00 | $ | 0.67 | $ | 0.09 | ||||
| Diluted | 0.11 | 0.00 | 0.67 | 0.09 | ||||||||
| Loss (earnings) per share from discontinued operations | ||||||||||||
| Basic | $ | (0.02 | ) | $ | 0.02 | $ | (0.04 | ) | $ | (0.08 | ) | |
| Diluted | (0.02 | ) | 0.02 | (0.04 | ) | (0.08 | ) | |||||
| Earnings per share | ||||||||||||
| Basic | $ | 0.09 | $ | 0.02 | $ | 0.63 | $ | 0.01 | ||||
| Diluted | 0.09 | 0.02 | 0.63 | 0.01 | ||||||||
| Weighted average common shares outstanding | ||||||||||||
| Basic | 60,205 | 59,773 | 60,024 | 59,952 | ||||||||
| Diluted | 60,678 | 60,004 | 60,403 | 60,269 |
| Enerpac Tool Group Corp. | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Condensed Consolidated Statements of Cash Flows | ||||||||||||
| (In thousands) | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||
| August 31, | August 31, | August 31, | August 31, | |||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Operating Activities | ||||||||||||
| Cash provided by operating activities - continuing operations | 29,491 | 12,638 | 54,860 | 17,999 | ||||||||
| Cash used in operating activities - discontinued operations | (197 | ) | (94 | ) | (677 | ) | (21,158 | ) | ||||
| Cash provided by (used in) operating activities | 29,294 | 12,544 | 54,183 | (3,159 | ) | |||||||
| Investing Activities | ||||||||||||
| Capital expenditures | (2,515 | ) | (2,745 | ) | (12,019 | ) | (12,053 | ) | ||||
| Proceeds from sale of property, plant and equipment | 8 | 73 | 22,409 | 708 | ||||||||
| Proceeds from company owned life insurance policies | - | - | 2,911 | - | ||||||||
| Cash paid for business acquisitions, net of cash acquired | - | 136 | - | (33,298 | ) | |||||||
| Proceeds from sale of business, net of transaction costs | - | - | - | 10,226 | ||||||||
| Other investing activities | - | (135 | ) | - | (710 | ) | ||||||
| Cash (used in) provided by investing activities - continuing operations | (2,507 | ) | (2,671 | ) | 13,301 | (35,127 | ) | |||||
| Cash provided by investing activities - discontinued operations | - | 2,809 | - | 211,200 | ||||||||
| Cash (used in) provided by investing activities | (2,507 | ) | 138 | 13,301 | 176,073 | |||||||
| Financing Activities | ||||||||||||
| Principal repayments on term loan | (20,000 | ) | (40,000 | ) | (90,000 | ) | (140,000 | ) | ||||
| Borrowings on revolving credit facility | - | 295,000 | 10,000 | 395,000 | ||||||||
| Principal repayments on term loan | - | - | - | (175,000 | ) | |||||||
| Redemption of 5.625% Senior Notes | - | (287,559 | ) | - | (287,559 | ) | ||||||
| Purchase of treasury shares | - | - | - | (27,520 | ) | |||||||
| Stock options, taxes paid related to the net share settlement of equity awards & other | 160 | 31 | 128 | (1,428 | ) | |||||||
| Payment of cash dividend | - | - | (2,394 | ) | (2,419 | ) | ||||||
| Cash used in financing activities - continuing operations | (19,840 | ) | (32,528 | ) | (82,266 | ) | (238,926 | ) | ||||
| Cash provided by financing activities - discontinued operations | - | - | 750 | - | ||||||||
| Cash used in financing activities | (19,840 | ) | (32,528 | ) | (81,516 | ) | (238,926 | ) | ||||
| Effect of exchange rate changes on cash | (2,874 | ) | 8,413 | 2,214 | 7,031 | |||||||
| Net cash increase (decrease) from continuing operations | 4,270 | (14,148 | ) | (11,891 | ) | (249,023 | ) | |||||
| Net cash (decrease) increase from discontinued operations | (197 | ) | 2,715 | 73 | 190,042 | |||||||
| Net increase (decrease) from cash and cash equivalents | 4,073 | (11,433 | ) | (11,818 | ) | (58,981 | ) | |||||
| Cash and cash equivalents - beginning of period | 136,279 | 163,603 | 152,170 | 211,151 | ||||||||
| Cash and cash equivalents - end of period | $ | 140,352 | $ | 152,170 | $ | 140,352 | $ | 152,170 |
| Enerpac Tool Group Corp. | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Supplemental Unaudited Data | ||||||||||||||||||||||||||||||
| Reconciliation of GAAP Measures to Non-GAAP Measures | ||||||||||||||||||||||||||||||
| (Dollars in thousands) | Fiscal 2020 | Fiscal 2021 | ||||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | TOTAL | Q1 | Q2 | Q3 | Q4 | TOTAL | |||||||||||||||||||||
| Sales | ||||||||||||||||||||||||||||||
| Industrial Tool & Services Segment | $ | 135,592 | $ | 123,361 | $ | 92,865 | $ | 103,044 | $ | 454,863 | $ | 112,175 | $ | 112,739 | $ | 133,400 | $ | 134,811 | $ | 493,125 | ||||||||||
| Other | 11,082 | 10,025 | 9,014 | 8,309 | 38,429 | 7,255 | 7,915 | 9,749 | 10,616 | 35,535 | ||||||||||||||||||||
| Total | $ | 146,674 | $ | 133,386 | $ | 101,879 | $ | 111,353 | $ | 493,292 | $ | 119,430 | $ | 120,654 | $ | 143,149 | $ | 145,427 | $ | 528,660 | ||||||||||
| % Sales Growth | ||||||||||||||||||||||||||||||
| Industrial Tool & Services Segment | -9 | % | -17 | % | -44 | % | -29 | % | -25 | % | -17 | % | -9 | % | 44 | % | 31 | % | 8 | % | ||||||||||
| Other | 12 | % | -2 | % | -21 | % | -39 | % | -15 | % | -35 | % | -21 | % | 8 | % | 28 | % | -8 | % | ||||||||||
| Total | -7 | % | -17 | % | -43 | % | -30 | % | -25 | % | -19 | % | -10 | % | 41 | % | 31 | % | 7 | % | ||||||||||
| Operating Profit (Loss) from Continuing Operations | ||||||||||||||||||||||||||||||
| Industrial Tool & Services Segment | $ | 25,928 | $ | 20,963 | $ | 8,228 | $ | 12,166 | $ | 67,284 | $ | 17,362 | $ | 14,880 | $ | 25,304 | $ | 26,772 | $ | 84,318 | ||||||||||
| Other | 399 | (684 | ) | 21 | (1,371 | ) | (1,635 | ) | (1,662 | ) | (1,834 | ) | 14 | (968 | ) | (4,450 | ) | |||||||||||||
| Corporate / General | (11,342 | ) | (10,349 | ) | (8,197 | ) | (6,158 | ) | (36,045 | ) | (6,282 | ) | (6,289 | ) | (5,808 | ) | (6,535 | ) | (24,915 | ) | ||||||||||
| Adjusted operating profit | $ | 14,985 | $ | 9,930 | $ | 52 | $ | 4,637 | $ | 29,604 | $ | 9,418 | $ | 6,757 | $ | 19,510 | $ | 19,269 | $ | 54,953 | ||||||||||
| Impairment & divestiture benefit (charges) | 1,356 | 768 | 1,443 | (408 | ) | 3,159 | (139 | ) | (401 | ) | - | (5,659 | ) | (6,198 | ) | |||||||||||||||
| Restructuring & other exit charges (1) | (1,972 | ) | (1,929 | ) | (3,292 | ) | (987 | ) | (8,179 | ) | (210 | ) | (649 | ) | (1,571 | ) | 37 | (2,392 | ) | |||||||||||
| Purchase accounting inventory step-up charge | - | (202 | ) | (201 | ) | - | (403 | ) | - | - | - | - | - | |||||||||||||||||
| Gain on sale of facility, net of transaction charges | - | - | - | - | - | - | - | 5,359 | - | 5,359 | ||||||||||||||||||||
| Corporate development and board search charges | - | - | - | - | - | - | - | (551 | ) | (58 | ) | (609 | ) | |||||||||||||||||
| Operating profit (loss) | $ | 14,369 | $ | 8,567 | $ | (1,998 | ) | $ | 3,242 | $ | 24,181 | $ | 9,069 | $ | 5,707 | $ | 22,747 | $ | 13,589 | $ | 51,113 | |||||||||
| Adjusted Operating Profit % | ||||||||||||||||||||||||||||||
| Industrial Tool & Services Segment | 19.1 | % | 17.0 | % | 8.9 | % | 11.8 | % | 14.8 | % | 15.5 | % | 13.2 | % | 19.0 | % | 19.9 | % | 17.1 | % | ||||||||||
| Other | 3.6 | % | -6.8 | % | 0.2 | % | -16.5 | % | -4.3 | % | -22.9 | % | -23.2 | % | 0.1 | % | -9.1 | % | -12.5 | % | ||||||||||
| Adjusted Operating Profit % | 10.2 | % | 7.4 | % | 0.1 | % | 4.2 | % | 6.0 | % | 7.9 | % | 5.6 | % | 13.6 | % | 13.2 | % | 10.4 | % | ||||||||||
| EBITDA from Continuing Operations (2) | ||||||||||||||||||||||||||||||
| Earnings (loss) from continuing operations | $ | 6,372 | $ | 3,918 | $ | (4,930 | ) | $ | 197 | $ | 5,557 | $ | 4,822 | $ | 3,584 | $ | 25,257 | $ | 6,549 | $ | 40,212 | |||||||||
| Financing costs, net | 6,729 | 4,630 | 4,552 | 3,307 | 19,218 | 1,716 | 1,338 | 1,340 | 870 | 5,266 | ||||||||||||||||||||
| Income tax expense (benefit) | 950 | 806 | (407 | ) | 943 | 2,292 | 2,258 | 1 | (4,390 | ) | 5,895 | 3,763 | ||||||||||||||||||
| Depreciation & amortization | 4,779 | 5,277 | 5,318 | 5,347 | 20,720 | 5,458 | 5,507 | 5,473 | 5,173 | 21,611 | ||||||||||||||||||||
| EBITDA | $ | 18,830 | $ | 14,631 | $ | 4,533 | $ | 9,794 | $ | 47,787 | $ | 14,254 | $ | 10,430 | $ | 27,680 | $ | 18,487 | $ | 70,852 | ||||||||||
| Adjusted EBITDA from Continuing Operations (2) | ||||||||||||||||||||||||||||||
| Industrial Tool & Services Segment | $ | 28,996 | $ | 24,022 | $ | 11,906 | $ | 15,938 | $ | 80,862 | $ | 21,002 | $ | 18,210 | $ | 28,873 | $ | 30,421 | $ | 98,506 | ||||||||||
| Other | 1,275 | 244 | 926 | (449 | ) | 1,996 | (740 | ) | (942 | ) | 897 | (133 | ) | (918 | ) | |||||||||||||||
| Corporate / General | (10,825 | ) | (8,272 | ) | (6,249 | ) | (5,058 | ) | (30,406 | ) | (5,659 | ) | (5,788 | ) | (5,327 | ) | (6,121 | ) | (22,896 | ) | ||||||||||
| Adjusted EBITDA | $ | 19,446 | $ | 15,994 | $ | 6,583 | $ | 10,431 | $ | 52,452 | $ | 14,603 | $ | 11,480 | $ | 24,443 | $ | 24,167 | $ | 74,692 | ||||||||||
| Impairment & divestiture benefit (charges) | 1,356 | 768 | 1,443 | (408 | ) | 3,159 | (139 | ) | (401 | ) | - | (5,659 | ) | (6,198 | ) | |||||||||||||||
| Restructuring & other exit charges (1) | (1,972 | ) | (1,929 | ) | (3,292 | ) | (987 | ) | (8,179 | ) | (210 | ) | (649 | ) | (1,571 | ) | 37 | (2,392 | ) | |||||||||||
| Purchase accounting inventory step-up charge | - | (202 | ) | (201 | ) | - | (403 | ) | - | - | - | - | - | |||||||||||||||||
| Pension curtailment | - | - | - | 758 | 758 | - | - | - | - | - | ||||||||||||||||||||
| Gain on sale of facility, net of transaction charges | - | - | - | - | - | - | - | 5,359 | - | 5,359 | ||||||||||||||||||||
| Corporate development and board search charges | - | - | - | - | - | - | - | (551 | ) | (58 | ) | (609 | ) | |||||||||||||||||
| EBITDA | $ | 18,830 | $ | 14,631 | $ | 4,533 | $ | 9,794 | $ | 47,787 | $ | 14,254 | $ | 10,430 | $ | 27,680 | $ | 18,487 | $ | 70,852 | ||||||||||
| Adjusted EBITDA % | ||||||||||||||||||||||||||||||
| Industrial Tool & Services Segment | 21.4 | % | 19.5 | % | 12.8 | % | 15.5 | % | 17.8 | % | 18.7 | % | 16.2 | % | 21.6 | % | 22.6 | % | 20.0 | % | ||||||||||
| Other | 11.5 | % | 2.4 | % | 10.3 | % | -5.4 | % | 5.2 | % | -10.2 | % | -11.9 | % | 9.2 | % | -1.3 | % | -2.6 | % | ||||||||||
| Adjusted EBITDA % | 13.3 | % | 12.0 | % | 6.5 | % | 9.4 | % | 10.6 | % | 12.2 | % | 9.5 | % | 17.1 | % | 16.6 | % | 14.1 | % | ||||||||||
| Notes: | ||||||||||||||||||||||||||||||
| --- | ||||||||||||||||||||||||||||||
| (1) Approximately $0.8 million of the Q3 fiscal 2020 restructuring & other exit charges were recorded in cost of products sold. | ||||||||||||||||||||||||||||||
| (2) EBITDA represents net earnings (loss) from continuing operations before financing costs, net, income tax (benefit) expense, and depreciation<br> & amortization. EBITDA is not a calculation based upon GAAP. The amounts included in the EBITDA and Adjusted EBITDA calculation, however, are derived from amounts included in the Condensed Consolidated Statements of Operations.<br> EBITDA and adjusted EBITDA should not be considered as alternatives to net earnings (loss), operating profit (loss) or operating cash flows. The Company has presented EBITDA and adjusted EBITDA because it regularly reviews these<br> performance measures. In addition, EBITDA and adjusted EBITDA are used by many of our investors and lenders, and are presented as a convenience to them. The EBITDA and adjusted EBITDA measures presented may not always be comparable to<br> similarly titled measures reported by other companies due to differences in the components of the calculation. |
| Enerpac Tool Group Corp. | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Supplemental Unaudited Data | ||||||||||||||||||||||||||||||
| Reconciliation of GAAP Measures to Non-GAAP Measures (Continued) | ||||||||||||||||||||||||||||||
| (Dollars in thousands, except for per share amounts) | ||||||||||||||||||||||||||||||
| Fiscal 2020 | Fiscal 2021 | |||||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | TOTAL | Q1 | Q2 | Q3 | Q4 | TOTAL | |||||||||||||||||||||
| Adjusted Earnings (Loss) (3) | ||||||||||||||||||||||||||||||
| Net Earnings (Loss) | $ | 2,121 | $ | 2,162 | $ | (4,999 | ) | $ | 1,439 | $ | 723 | $ | 4,598 | $ | 3,182 | $ | 25,031 | $ | 5,266 | $ | 38,077 | |||||||||
| (Loss) Earnings from Discontinued Operations, net of income tax | (4,251 | ) | (1,756 | ) | (69 | ) | 1,242 | (4,834 | ) | (224 | ) | (402 | ) | (226 | ) | (1,283 | ) | (2,135 | ) | |||||||||||
| Earnings (Loss) from Continuing Operations | $ | 6,372 | $ | 3,918 | $ | (4,930 | ) | $ | 197 | $ | 5,557 | $ | 4,822 | $ | 3,584 | $ | 25,257 | $ | 6,549 | $ | 40,212 | |||||||||
| Impairment & divestiture (benefit) charges | (1,356 | ) | (768 | ) | (1,443 | ) | 408 | (3,159 | ) | 139 | 401 | - | 5,659 | 6,198 | ||||||||||||||||
| Restructuring & other exit charges | 1,972 | 1,929 | 3,292 | 987 | 8,179 | 210 | 649 | 1,571 | (37 | ) | 2,392 | |||||||||||||||||||
| Accelerated debt issuance costs | 625 | - | - | 1,041 | 1,666 | - | - | - | - | - | ||||||||||||||||||||
| Purchase accounting inventory step-up charge | - | 202 | 201 | - | 403 | - | - | - | - | - | ||||||||||||||||||||
| Pension curtailment | - | - | - | (758 | ) | (758 | ) | - | - | - | - | - | ||||||||||||||||||
| Gain on sale of facility, net of transaction charges | - | - | - | - | - | - | - | (5,359 | ) | - | (5,359 | ) | ||||||||||||||||||
| Corporate development and board search charges | - | - | - | - | - | - | - | 551 | 58 | 609 | ||||||||||||||||||||
| Net tax effect of reconciling items above | (52 | ) | (57 | ) | (624 | ) | (503 | ) | (1,236 | ) | (15 | ) | (100 | ) | 2,647 | (548 | ) | 1,984 | ||||||||||||
| Other income tax benefit | - | (74 | ) | - | - | (74 | ) | - | (632 | ) | (7,523 | ) | - | (8,155 | ) | |||||||||||||||
| Adjusted Earnings (Loss) from Continuing Operations (4) | $ | 7,561 | $ | 5,150 | $ | (3,504 | ) | $ | 1,372 | $ | 10,578 | $ | 5,156 | $ | 3,902 | $ | 17,144 | $ | 11,681 | $ | 37,881 | |||||||||
| Adjusted Diluted Earnings (loss) per share (3) | ||||||||||||||||||||||||||||||
| Net Earnings (Loss) | $ | 0.03 | $ | 0.04 | $ | (0.08 | ) | $ | 0.02 | $ | 0.01 | $ | 0.08 | $ | 0.05 | $ | 0.41 | $ | 0.09 | $ | 0.63 | |||||||||
| (Loss) Earnings from Discontinued Operations, net of income tax | (0.07 | ) | (0.03 | ) | 0.00 | 0.02 | (0.08 | ) | (0.00 | ) | (0.01 | ) | (0.00 | ) | (0.02 | ) | (0.04 | ) | ||||||||||||
| Earnings (Loss) from Continuing Operations | $ | 0.11 | $ | 0.06 | $ | (0.08 | ) | $ | 0.00 | $ | 0.09 | $ | 0.08 | $ | 0.06 | $ | 0.42 | $ | 0.11 | $ | 0.67 | |||||||||
| Impairment & divestiture (benefit) charges, net of tax effect | (0.02 | ) | (0.01 | ) | (0.02 | ) | 0.00 | (0.04 | ) | 0.00 | 0.01 | - | 0.08 | 0.09 | ||||||||||||||||
| Restructuring & other exit charges, net of tax effect | 0.02 | 0.04 | 0.04 | 0.02 | 0.11 | 0.00 | 0.01 | 0.02 | 0.00 | 0.03 | ||||||||||||||||||||
| Accelerated debt issuance costs, net of tax effect | 0.01 | - | - | 0.01 | 0.02 | - | - | - | - | - | ||||||||||||||||||||
| Purchase accounting inventory step-up charge, net of tax effect | - | 0.00 | 0.00 | - | 0.01 | - | - | - | - | - | ||||||||||||||||||||
| Pension curtailment, net of tax effect | - | - | - | (0.01 | ) | (0.01 | ) | - | - | - | - | - | ||||||||||||||||||
| Gain on sale of facility, net of transaction charges | - | - | - | - | - | - | - | (0.04 | ) | 0.00 | (0.04 | ) | ||||||||||||||||||
| Corporate development and board search charges | - | - | - | - | - | - | - | 0.01 | 0.00 | 0.01 | ||||||||||||||||||||
| Other income tax benefit | - | 0.00 | - | - | - | - | (0.01 | ) | (0.12 | ) | - | (0.14 | ) | |||||||||||||||||
| Adjusted Diluted Earnings (Loss) per share from Continuing Operations (4) | $ | 0.12 | $ | 0.09 | $ | (0.06 | ) | $ | 0.02 | $ | 0.18 | $ | 0.09 | $ | 0.06 | $ | 0.28 | $ | 0.19 | $ | 0.63 | |||||||||
| Free Cash Flow (5) | ||||||||||||||||||||||||||||||
| Cash (used in) provided by operating activities | $ | (22,927 | ) | $ | (5,814 | ) | $ | 13,038 | $ | 12,544 | $ | (3,159 | ) | $ | 8,667 | $ | 4,579 | $ | 11,643 | $ | 29,294 | $ | 54,183 | |||||||
| Capital expenditures | (3,187 | ) | (3,780 | ) | (2,341 | ) | (2,745 | ) | (12,053 | ) | (1,905 | ) | (3,725 | ) | (3,874 | ) | (2,515 | ) | (12,019 | ) | ||||||||||
| Proceeds from sale of property, plant and equipment | 162 | 288 | 185 | 73 | 708 | 47 | 548 | 21,806 | 8 | 22,409 | ||||||||||||||||||||
| Other | 1,353 | 122 | - | 12 | 1,487 | (2 | ) | (518 | ) | 4,937 | 182 | 4,599 | ||||||||||||||||||
| Free Cash Flow | $ | (24,599 | ) | $ | (9,184 | ) | $ | 10,882 | $ | 9,884 | $ | (13,017 | ) | $ | 6,807 | $ | 884 | $ | 34,512 | $ | 26,969 | $ | 69,172 | |||||||
| Notes continued: | ||||||||||||||||||||||||||||||
| --- | ||||||||||||||||||||||||||||||
| (3) Adjusted earnings (loss) from continuing operations and adjusted diluted earnings (loss) per share represent net earnings (loss) and diluted<br> earnings (loss) per share per the Condensed Consolidated Statements of Operations net of charges or credits for items to be highlighted for comparability purposes. These measures are not calculated based upon generally accepted<br> accounting principles (GAAP) and should not be considered as an alternative to net earnings (loss) or diluted earnings (loss) per share or as an indicator of the Company's operating performance. However, this presentation is important<br> to investors for understanding the operating results of the current portfolio of Enerpac Tool Group companies. | ||||||||||||||||||||||||||||||
| (4) Q3 Fiscal 2020 results included an adjusted loss from continuing operations, therefore adjusted loss per share is not diluted and is,<br> instead, calculated with basic shares. | ||||||||||||||||||||||||||||||
| (5) Free cash flow primarily represents the operating cash flow, proceeds from the sale of property, plant and equipment combined with capital<br> expenditures. | ||||||||||||||||||||||||||||||
| For all reconciliations of GAAP measures to Non-GAAP measures, the summation of the individual components may not equal the total due to rounding. With respect to the earnings per share reconciliations the impact of share dilution on the calculation of the net earnings or loss per share and discontinued operations per share may result in the summation of these components not equaling the total earnings (loss) per share from continuing operations. |
Contacts
Bobbi Belstner
Senior Director, Investor Relations and Strategy
262.293.1912