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 30, 2020
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 30, 2020, Enerpac Tool Group Corp. (the “Company”) announced its results of operations for the fourth quarter ended August 31, 2020. A copy of the press release announcing the Company's results for the fourth quarter ended August 31, 2020 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 30, 2020.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
2
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 30, 2020
| ENERPAC TOOL GROUP CORP. | |
|---|---|
| By: | /s/ Fabrizio Rasetti |
| Fabrizio Rasetti | |
| Executive Vice President, General Counsel and<br><br> Secretary |
3
Exhibit 99.1
Enerpac Tool Group Reports Fourth Quarter 2020 Results
Fourth Quarter of Fiscal 2020 Highlights*
- Fourth quarter fiscal 2020 results reflect sequential improvement from the third quarter but continued to be pressured due to COVID-19. - Net sales from continuing operations were $111 million for the quarter compared to $102 million from the third quarter, a 9% sequential improvement. Industrial Tools & Services (IT&S) sales increased 11% sequentially. IT&S product core sales improved to a 20% decline in the fourth quarter compared to a 36% decline in the previous quarter. - Executed on key priorities of keeping employees safe, controlling costs and maintaining a strong balance sheet. Cost control actions resulted in solid decremental margins of 28%. By managing cash, reducing working capital and paying down debt, leverage remained well within the Company’s preferred range. - Consolidated core sales decreased 27% year-over-year, with product sales declining 23% and service sales declining 45%. The net year-over-year impact on net sales from acquisitions and divestitures/strategic exits was a reduction of 4% while foreign currency benefited sales 1%. - GAAP operating margin from continuing operations was 2.9% for the quarter versus 3.4% in the fourth quarter of fiscal 2019. Adjusted operating margin from continuing operations was 4.2% for the quarter ended August 31, 2020 compared to 12.1% for the quarter ended August 31, 2019. - Adjusted EBITDA margin from continuing operations was 9.4% in the fourth quarter of fiscal 2020 compared to 14.8% in the comparable prior year period. - GAAP diluted earnings per share (“EPS”) from continuing operations was $0.00 in the fourth quarter of fiscal 2020 versus a loss per share from continuing operations of ($0.05) in the comparable period in fiscal 2019. Adjusted diluted EPS from continuing operations was $0.02 in the fourth quarter of fiscal 2020 compared to $0.21 in the fourth quarter of fiscal 2019. - Leverage (Net Debt to Adjusted EBITDA) was 1.8x at August 31, 2020 consistent with May 31, 2020. - Due to continued market uncertainty created by the COVID-19 global pandemic, Enerpac Tool Group is not providing fiscal 2021 guidance at this time. *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 financial measures can be found in the tables accompanying this release.
MILWAUKEE--(BUSINESS WIRE)--September 30, 2020--Enerpac Tool Group Corp. (NYSE: EPAC) (the “Company”), today announced results for its fiscal 2020 fourth quarter ended August 31, 2020.
“Based on our sequential improvements from the third to fourth quarter, we believe our business is beginning to see signs of recovery from the ongoing COVID-19 global pandemic. Our team was able to drive increased commercial activity, which resulted in quarter-over-quarter improvement, and our cost control actions resulted in solid decremental margins as we wrapped up fiscal 2020. During the quarter we remained focused on our top priorities, including keeping our employees safe, supporting our customers, launching new products, diligently managing our costs and maintaining our strong balance sheet,” said Randy Baker, Enerpac Tool Group’s President and CEO.
Mr. Baker continued, “While the pandemic-driven economic conditions continue to present challenges for our business, the resiliency and performance of our teams across the globe give me confidence that we will achieve our long-term strategic priorities. Our ongoing commitment to and success in new product development continues to contribute positively to our results. In addition, we have demonstrated our ability to quickly take the appropriate actions to respond to changing market dynamics and position Enerpac Tool Group to come out of this pandemic stronger than ever.”
| Consolidated Results from Continuing Operations | |||
|---|---|---|---|
| (US in millions, except per share) | |||
| Twelve Months Ended | |||
| August 31, <br><br> 2019 | August 31, <br><br> 2020 | August 31, <br><br> 2019 | |
| Net Sales | $158.3 | $493.3 | $654.8 |
| Net Income (Loss) | ($3.1) | $5.6 | $8.1 |
| Earnings (Loss) Per Share | ($0.05) | $0.09 | $0.13 |
| Adjusted Diluted Earnings Per Share | $0.21 | $0.18 | $0.73 |
All values are in US Dollars.
- Consolidated net sales from continuing operations for the fourth quarter were $111.4 million compared to $158.3 million in the prior year fourth quarter. Core sales decreased 27% year-over-year, with product sales down 23% and service down 45%. The net impact of acquisitions and divestitures/strategic exits decreased net sales by an additional 4%, and the impact of foreign currency benefited sales 1%.
- Fiscal 2020 fourth quarter net income from continuing operations and diluted earnings per share from continuing operations were $0.2 million and $0.00, respectively, compared to a net loss from continuing operations of ($3.1) million and a
loss per share from continuing operations of ($0.05) in the fourth quarter of fiscal 2019. Fiscal 2020 fourth quarter net income from continuing operations included:
- An impairment and 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 Senior Notes.
- Fiscal 2019 fourth quarter net income from continuing operations included an impairment and divestiture charge of $8.8 million ($6.9 million or $0.11 per share, after tax) related to the write-down of certain tradenames and customer relationships, restructuring charges of $4.8 million ($6.3 million or $0.10 per share, after tax) related to IT&S restructuring, and $2.7 million ($0.05 per share) of charges primarily related to U.S. tax reform.
- Excluding restructuring, impairment & divestiture charges, pension curtailment benefit and accelerated debt issuance costs, adjusted diluted EPS from continuing operations was $0.02 for the fourth quarter of fiscal 2020 compared to $0.21 in the comparable prior year period.
- Consolidated net sales for the twelve months ended August 31, 2020 were $493.3 million compared to $654.8 million in the prior year period. Core sales decreased 20% year-over-year, while the net impact of acquisitions and divestitures/strategic exits decreased net sales by 6% and the impact of foreign currency was minimal.
- Consolidated net income from continuing operations and EPS for the twelve months ended August 31, 2020 were $5.6 million and $0.09, respectively, compared to net income from continuing operations and EPS of $8.1 million and $0.13, respectively, in the comparable prior year period.
| Industrial Tools & Services | |||
|---|---|---|---|
| (US in millions) | |||
| Twelve Months Ended | |||
| August 31, <br><br> 2019 | August 31, <br><br> 2020 | August 31, <br><br> 2019 | |
| Sales | $144.6 | $454.9 | $609.5 |
| Operating Profit | $13.6 | $65.5 | $101.4 |
| Adjusted Op Profit (1) | $27.3 | $67.3 | $116.2 |
| Adjusted Op Profit % (1) | 18.8% | 14.8% | 19.1% |
All values are in US Dollars.
^(1)^Excludes $0.5 million of restructuring charges and $0.4 million of impairment and divestiture charges in the fourth quarter of fiscal 2020 compared to $4.8 million of restructuring charges and $8.8 million of impairment and divestiture charges in the three months ended August 31, 2019. The twelve months ended August 31, 2020 excludes $4.5 million of restructuring charges, $3.2 million of net impairment and divestiture gains and $0.4 million of purchase accounting charges compared to $6.0 million of restructuring charges and $8.8 million of impairment and divestiture charges in the twelve months ended August 31, 2019.
- Fourth quarter fiscal 2020 net sales were $103.0 million, 29% lower than the prior fiscal year’s fourth quarter. Core sales decreased 26% year-over-year, while the net impact of acquisitions and divestitures/strategic exits decreased net sales 4% and the impact of foreign currency increased sales 1%.
- The decrease in revenue is attributable to the decline in demand driven by the COVID-19 pandemic, volatile oil pricing and anticipated year-over-year declines due to strategic exits.
- Adjusted operating profit margin of 11.8% in the quarter decreased year-over-year primarily due to reduced volume, partially offset by significant savings from effective cost management.
Corporate Expenses and Income Taxes (excluding restructuring items)
- Corporate expenses from continuing operations for the fourth quarter of fiscal 2020 were $6.2 million, $3.5 million lower than the comparable prior year period, primarily resulting from the impact of restructuring actions, short-term COVID cost actions, lower Board of Director expenses and lower incentive compensation costs.
- The fourth quarter effective income tax rate from continuing operations of approximately 51% was higher than the fourth quarter fiscal 2019 rate of approximately (5%).
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 the ancillary impacts from certain retained liabilities subsequent to the completion date.
| Balance Sheet and Leverage | ||
|---|---|---|
| (US in millions) | ||
| May 31, <br><br> 2020 | August 31, <br><br> 2019 | |
| Cash Balance | $163.6 | $211.2 |
| Debt Balance | $286.5 | $460.4 |
| Net Debt to Adjusted EBITDA** | 1.8 | 1.7 |
All values are in US Dollars.
Net debt at August 31, 2020 was approximately $103 million (total debt of $255 million less $152 million of cash), which decreased approximately $20 million from the prior quarter. Net Debt to Adjusted EBITDA from continuing operations was 1.8x at August 31, 2020.
**Adjusted EBITDA is calculated for the twelve months then ended.
Outlook
Due to the uncertainty and lack of forward visibility into market conditions caused by COVID-19, Enerpac Tool Group is not providing fiscal 2021 guidance at this time.
Mr. Baker said, “As we move into fiscal 2021, we expect to continue to see a sequential uptick in business activity as economies slowly adjust to life in a pandemic across the globe. While we are optimistic that conditions will continue to improve, it remains uncertain when demand will return to normal levels. The actions we have taken to manage through the pandemic have us well positioned to capture demand when it returns, drive growth and profitability and deliver value to shareholders.”
Conference Call Information
An investor conference call is scheduled for 10:00 am CT today, September 30, 2020. 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, 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, employee mobility, and whether the Company’s business and those of its customers and vendors will continue to be treated as “essential” operations under government orders restricting business activities or, even if so treated, whether site-specific health and safety concerns related to COVID-19 might otherwise 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, restructuring, operating margin risk due to competitive pricing and operating efficiencies, supply chain risk, material and labor cost increases, tax law changes, foreign currency fluctuations and interest rate risk. See the Company’s Form 10-K for the fiscal year ended August 31, 2019 and Form 10-Q for the period ended May 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. They 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 and net debt. This press release includes reconciliations of these non-GAAP measures to the most comparable GAAP measure, including in the tables attached to this press release. Management believes these non-GAAP measures 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 factors 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 90 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 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.
| Enerpac Tool Group Corp. | ||||||
|---|---|---|---|---|---|---|
| Condensed Consolidated Balance Sheets | ||||||
| (Dollars in thousands) | ||||||
| (Unaudited) | ||||||
| August 31, | August 31, | |||||
| 2020 | 2019 | |||||
| ASSETS | ||||||
| Current assets | ||||||
| Cash and cash equivalents | $ | 152,170 | $ | 211,151 | ||
| Accounts receivable, net | 84,170 | 125,883 | ||||
| Inventories, net | 69,171 | 77,187 | ||||
| Assets from discontinued operations | - | 285,578 | ||||
| Other current assets | 35,621 | 30,526 | ||||
| Total current assets | 341,132 | 730,325 | ||||
| Property, plant and equipment, net | 61,405 | 56,729 | ||||
| Goodwill | 281,154 | 260,415 | ||||
| Other intangible assets, net | 62,382 | 52,375 | ||||
| Other long-term assets | 78,220 | 24,430 | ||||
| Total assets | $ | 824,293 | $ | 1,124,274 | ||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| Current liabilities | ||||||
| Trade accounts payable | $ | 45,069 | $ | 76,914 | ||
| Accrued compensation and benefits | 17,793 | 26,421 | ||||
| Current maturities of debt | - | 7,500 | ||||
| Income taxes payable | 1,937 | 4,838 | ||||
| Liabilities from discontinued operations | - | 143,763 | ||||
| Other current liabilities | 40,723 | 40,965 | ||||
| Total current liabilities | 105,522 | 300,401 | ||||
| Long-term debt, net | 255,000 | 452,945 | ||||
| Deferred income taxes | 1,708 | 1,564 | ||||
| Pension and postretirement benefit liabilities | 20,190 | 20,213 | ||||
| Other long-term liabilities | 82,647 | 47,972 | ||||
| Total liabilities | 465,067 | 823,095 | ||||
| Shareholders' equity | ||||||
| Capital stock | 16,519 | 16,384 | ||||
| Additional paid-in capital | 193,492 | 181,213 | ||||
| Treasury stock | (667,732 | ) | (640,212 | ) | ||
| Retained earnings | 917,671 | 915,466 | ||||
| Accumulated other comprehensive loss | (100,724 | ) | (171,672 | ) | ||
| Stock held in trust | (2,562 | ) | (3,070 | ) | ||
| Deferred compensation liability | 2,562 | 3,070 | ||||
| Total shareholders' equity | 359,226 | 301,179 | ||||
| Total liabilities and shareholders' equity | $ | 824,293 | $ | 1,124,274 |
| 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, | |||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Net sales | $ | 111,353 | $ | 158,324 | $ | 493,292 | $ | 654,758 | ||||
| Cost of products sold | 66,888 | 89,254 | 276,099 | 362,106 | ||||||||
| Gross profit | 44,465 | 69,070 | 217,193 | 292,652 | ||||||||
| Selling, administrative and engineering expenses | 37,672 | 49,866 | 180,513 | 209,231 | ||||||||
| Amortization of intangible assets | 2,156 | 1,933 | 8,323 | 8,922 | ||||||||
| Restructuring charges | 987 | 3,025 | 7,335 | 4,156 | ||||||||
| Impairment & divestiture charges (benefit) | 408 | 8,796 | (3,159 | ) | 22,827 | |||||||
| Operating profit | 3,242 | 5,450 | 24,181 | 47,516 | ||||||||
| Financing costs, net | 3,307 | 6,563 | 19,218 | 28,163 | ||||||||
| Other (income) expense, net | (1,205 | ) | 394 | (2,886 | ) | 629 | ||||||
| Income (loss) before income tax expense | 1,140 | (1,507 | ) | 7,849 | 18,724 | |||||||
| Income tax expense | 943 | 1,626 | 2,292 | 10,657 | ||||||||
| Earnings (loss) from continuing operations | 197 | (3,133 | ) | 5,557 | 8,067 | |||||||
| Earnings (loss) from discontinued operations, net of income taxes | 1,242 | (263,731 | ) | (4,834 | ) | (257,212 | ) | |||||
| Net earnings (loss) | $ | 1,439 | $ | (266,864 | ) | $ | 723 | $ | (249,145 | ) | ||
| Earnings (loss) from continuing operations per share | ||||||||||||
| Basic | $ | 0.00 | $ | (0.05 | ) | $ | 0.09 | $ | 0.13 | |||
| Diluted | 0.00 | (0.05 | ) | 0.09 | 0.13 | |||||||
| Earnings (loss) from discontinued operations | ||||||||||||
| Basic | $ | 0.02 | $ | (4.33 | ) | $ | (0.08 | ) | $ | (4.21 | ) | |
| Diluted | 0.02 | (4.33 | ) | (0.08 | ) | (4.18 | ) | |||||
| Earnings (loss) per share | ||||||||||||
| Basic | $ | 0.02 | $ | (4.38 | ) | $ | 0.01 | $ | (4.07 | ) | ||
| Diluted | 0.02 | (4.38 | ) | 0.01 | (4.04 | ) | ||||||
| Weighted average common shares outstanding | ||||||||||||
| Basic | 59,773 | 60,907 | 59,952 | 61,151 | ||||||||
| Diluted | 60,004 | 60,907 | 60,269 | 61,607 |
| 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, | |||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Operating Activities | ||||||||||||
| Cash provided by (used in) operating activities | $ | 12,544 | $ | 52,654 | $ | (3,159 | ) | $ | 53,845 | |||
| Investing Activities | ||||||||||||
| Capital expenditures | (2,745 | ) | (3,036 | ) | (13,468 | ) | (26,755 | ) | ||||
| Cash paid for business acquisitions, net of cash acquired | 136 | - | (33,298 | ) | - | |||||||
| Proceeds from sale of EC&S segment, net of transaction costs | 2,809 | - | 212,460 | - | ||||||||
| Proceeds from sale of IT&S product lines, net of transaction costs | - | - | 10,226 | 36,159 | ||||||||
| Other investing activities | (62 | ) | 293 | 153 | 1,642 | |||||||
| Cash provided by (used in) investing activities | 138 | (2,743 | ) | 176,073 | 11,046 | |||||||
| Financing Activities | ||||||||||||
| Borrowings on revolver | 295,000 | - | 395,000 | - | ||||||||
| Redemption of 5.625% senior notes | (287,559 | ) | - | (287,559 | ) | - | ||||||
| Principal payments on revolver | (40,000 | ) | - | (140,000 | ) | - | ||||||
| Principal repayments on term loan | - | (15,000 | ) | (175,000 | ) | (72,500 | ) | |||||
| Payment for redemption of term loan | - | - | - | (200,000 | ) | |||||||
| Proceeds from issuance of term loan | - | - | - | 200,000 | ||||||||
| Purchase of treasury shares | - | (22,481 | ) | (27,520 | ) | (22,481 | ) | |||||
| Taxes paid related to the net share settlement of equity awards | (76 | ) | (61 | ) | (4,286 | ) | (1,872 | ) | ||||
| Stock option exercises & other | 107 | 548 | 3,092 | 1,900 | ||||||||
| Payment of cash dividend | - | - | (2,419 | ) | (2,439 | ) | ||||||
| Payment of debt issuance costs | - | - | (234 | ) | (2,125 | ) | ||||||
| Cash used in financing activities | (32,528 | ) | (36,994 | ) | (238,926 | ) | (99,517 | ) | ||||
| Effect of exchange rate changes on cash | 8,413 | (3,100 | ) | 7,031 | (4,713 | ) | ||||||
| Net (decrease) increase in cash and cash equivalents | (11,433 | ) | 9,817 | (58,981 | ) | (39,339 | ) | |||||
| Cash and cash equivalents - beginning of period | 163,603 | 201,334 | 211,151 | 250,490 | ||||||||
| Cash and cash equivalents - end of period | $ | 152,170 | $ | 211,151 | $ | 152,170 | $ | 211,151 |
| Enerpac Tool Group Corp. | |||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Supplemental Unaudited Data | |||||||||||||||||||||||||||||
| (Dollars in thousands) | Fiscal 2020 | ||||||||||||||||||||||||||||
| Q2 | Q3 | Q4 | TOTAL | Q1 | Q2 | Q3 | Q4 | TOTAL | |||||||||||||||||||||
| Sales | |||||||||||||||||||||||||||||
| Industrial Tool & Services Segment | 148,655 | $ | 149,521 | $ | 166,732 | $ | 144,607 | $ | 609,515 | $ | 135,592 | $ | 123,361 | $ | 92,865 | $ | 103,044 | $ | 454,863 | ||||||||||
| Other | 9,896 | 10,267 | 11,363 | 13,717 | 45,243 | 11,082 | 10,025 | 9,014 | 8,309 | 38,429 | |||||||||||||||||||
| Total | 158,551 | $ | 159,788 | $ | 178,095 | $ | 158,324 | $ | 654,758 | $ | 146,674 | $ | 133,386 | $ | 101,879 | $ | 111,353 | $ | 493,292 | ||||||||||
| % Sales Growth | |||||||||||||||||||||||||||||
| Industrial Tool & Services Segment | 5 | % | 9 | % | 5 | % | -6 | % | 3 | % | -9 | % | -17 | % | -44 | % | -29 | % | -25 | % | |||||||||
| Other | -28 | % | -12 | % | -3 | % | 5 | % | -10 | % | 12 | % | -2 | % | -21 | % | -39 | % | -15 | % | |||||||||
| Total | 2 | % | 8 | % | 4 | % | -5 | % | 2 | % | -7 | % | -17 | % | -43 | % | -30 | % | -25 | % | |||||||||
| Operating Profit (Loss) from Continuing Operations | |||||||||||||||||||||||||||||
| Industrial Tool & Services Segment | 26,345 | $ | 26,596 | $ | 35,992 | $ | 27,252 | $ | 116,185 | $ | 25,928 | $ | 20,963 | $ | 8,228 | $ | 12,166 | $ | 67,284 | ||||||||||
| Other | (484 | ) | 1,091 | 1,787 | 1,515 | 3,910 | 399 | (684 | ) | 21 | (1,371 | ) | (1,635 | ) | |||||||||||||||
| Corporate / General | (10,967 | ) | (11,659 | ) | (9,481 | ) | (9,679 | ) | (41,787 | ) | (11,342 | ) | (10,349 | ) | (8,197 | ) | (6,158 | ) | (36,045 | ) | |||||||||
| Adjusted operating profit | 14,894 | $ | 16,028 | $ | 28,298 | $ | 19,088 | $ | 78,308 | $ | 14,985 | $ | 9,930 | $ | 52 | $ | 4,637 | $ | 29,604 | ||||||||||
| Impairment & divestiture charges | (23,477 | ) | (3,543 | ) | 12,988 | (8,796 | ) | (22,827 | ) | 1,356 | 768 | 1,443 | (408 | ) | 3,159 | ||||||||||||||
| Restructuring & other exist charges (1) | 29 | (46 | ) | (1,115 | ) | (4,842 | ) | (5,973 | ) | (1,972 | ) | (1,929 | ) | (3,292 | ) | (987 | ) | (8,179 | ) | ||||||||||
| Debt modification charges | - | - | (288 | ) | - | (288 | ) | - | - | - | - | - | |||||||||||||||||
| Purchase accounting inventory step-up charge | - | - | - | - | - | - | (202 | ) | (201 | ) | - | (403 | ) | ||||||||||||||||
| Depreciation & amortization True up (2) | - | - | (1,704 | ) | - | (1,704 | ) | - | - | - | - | - | |||||||||||||||||
| Operating profit (loss) | (8,554 | ) | $ | 12,439 | $ | 38,179 | $ | 5,450 | $ | 47,516 | $ | 14,369 | $ | 8,567 | $ | (1,998 | ) | $ | 3,242 | $ | 24,181 | ||||||||
| Adjusted Operating Profit % | |||||||||||||||||||||||||||||
| Industrial Tool & Services Segment | 17.7 | % | 17.8 | % | 21.6 | % | 18.8 | % | 19.1 | % | 19.1 | % | 17.0 | % | 8.9 | % | 11.8 | % | 14.8 | % | |||||||||
| Other | -4.9 | % | 10.6 | % | 15.7 | % | 11.0 | % | 8.6 | % | 3.6 | % | -6.8 | % | 0.2 | % | -16.5 | % | -4.3 | % | |||||||||
| Adjusted Operating Profit % | 9.4 | % | 10.0 | % | 15.9 | % | 12.1 | % | 12.0 | % | 10.2 | % | 7.4 | % | 0.1 | % | 4.2 | % | 6.0 | % | |||||||||
| EBITDA from Continuing Operations | |||||||||||||||||||||||||||||
| Earnings (loss) from continuing operations | (16,423 | ) | $ | 765 | $ | 26,858 | $ | (3,133 | ) | $ | 8,067 | $ | 6,372 | $ | 3,918 | $ | (4,930 | ) | $ | 197 | $ | 5,557 | |||||||
| Financing costs, net | 7,298 | 7,157 | 7,146 | 6,563 | 28,163 | 6,729 | 4,630 | 4,552 | 3,307 | 19,218 | |||||||||||||||||||
| Income tax expense (benefit) | 66 | 4,002 | 4,962 | 1,626 | 10,657 | 950 | 806 | (407 | ) | 943 | 2,292 | ||||||||||||||||||
| Depreciation & amortization | 5,056 | 4,305 | 6,109 | 4,746 | 20,217 | 4,779 | 5,277 | 5,318 | 5,347 | 20,720 | |||||||||||||||||||
| EBITDA | (4,003 | ) | $ | 16,229 | $ | 45,075 | $ | 9,802 | $ | 67,104 | $ | 18,830 | $ | 14,631 | $ | 4,533 | $ | 9,794 | $ | 47,787 | |||||||||
| Adjusted EBITDA from Continuing Operations (3) | |||||||||||||||||||||||||||||
| Industrial Tool & Services Segment | 30,038 | $ | 30,153 | $ | 40,015 | $ | 29,964 | $ | 130,171 | $ | 28,996 | $ | 24,022 | $ | 11,906 | $ | 15,938 | $ | 80,862 | ||||||||||
| Other | 337 | 1,087 | 1,786 | 2,395 | 5,605 | 1,275 | 244 | 926 | (449 | ) | 1,996 | ||||||||||||||||||
| Corporate / General | (10,930 | ) | (11,422 | ) | (8,311 | ) | (8,919 | ) | (39,584 | ) | (10,825 | ) | (8,272 | ) | (6,249 | ) | (5,058 | ) | (30,406 | ) | |||||||||
| Adjusted EBITDA | 19,445 | $ | 19,818 | $ | 33,490 | $ | 23,440 | $ | 96,192 | $ | 19,446 | $ | 15,994 | $ | 6,583 | $ | 10,431 | $ | 52,452 | ||||||||||
| Impairment & divestiture charges | (23,477 | ) | (3,543 | ) | 12,988 | (8,796 | ) | (22,827 | ) | 1,356 | 768 | 1,443 | (408 | ) | 3,159 | ||||||||||||||
| Restructuring & other exist charges (1) | 29 | (46 | ) | (1,115 | ) | (4,842 | ) | (5,973 | ) | (1,972 | ) | (1,929 | ) | (3,292 | ) | (987 | ) | (8,179 | ) | ||||||||||
| Debt modification charges | - | - | (288 | ) | - | (288 | ) | - | - | - | - | - | |||||||||||||||||
| Purchase accounting inventory step-up charge | - | - | - | - | - | - | (202 | ) | (201 | ) | - | (403 | ) | ||||||||||||||||
| Pension curtailment | - | - | - | - | - | - | - | - | 758 | 758 | |||||||||||||||||||
| EBITDA | (4,003 | ) | $ | 16,229 | $ | 45,075 | $ | 9,802 | $ | 67,104 | $ | 18,830 | $ | 14,631 | $ | 4,533 | $ | 9,794 | $ | 47,787 | |||||||||
| Adjusted EBITDA % | |||||||||||||||||||||||||||||
| Industrial Tool & Services Segment | 20.2 | % | 20.2 | % | 24.0 | % | 20.7 | % | 21.4 | % | 21.4 | % | 19.5 | % | 12.8 | % | 15.5 | % | 17.8 | % | |||||||||
| Other | 3.4 | % | 10.6 | % | 15.7 | % | 17.5 | % | 12.4 | % | 11.5 | % | 2.4 | % | 10.3 | % | -5.4 | % | 5.2 | % | |||||||||
| Adjusted EBITDA % | 12.3 | % | 12.4 | % | 18.8 | % | 14.8 | % | 14.7 | % | 13.3 | % | 12.0 | % | 6.5 | % | 9.4 | % | 10.6 | % | |||||||||
| Notes: | |||||||||||||||||||||||||||||
| (1) Approximately 1.8 million of the Q4 fiscal 2019 and 0.8 million of the Q3 fiscal 2020 restructuring & exit charges were recorded in<br> cost of products sold. | |||||||||||||||||||||||||||||
| (2) Represents the depreciation and amortization expense true up for the Cortland business assets that were reclassified out of held for sale in<br> Q3 fiscal 2019, as though the assets had never been classified as held for sale. | |||||||||||||||||||||||||||||
| (3) EBITDA represents net earnings (loss) from continuing operations before financing costs, net, income tax (benefit) expense, and depreciation & amortization. EBITDA<br> 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. EBITDA should not be considered<br> as an alternative to net earnings (loss), operating profit (loss) or operating cash flows. The Company has presented EBITDA and adjusted EBITDA because it regularly reviews these performance measures. In addition, EBITDA and adjusted<br> 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 similarly titled measures reported by other companies due<br> to differences in the components of the calculation. |
All values are in US Dollars.
| Enerpac Tool Group Corp. | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Supplemental Unaudited Data | ||||||||||||||||||||||||||||||
| Reconciliation of GAAP Measures to Non-GAAP Measures | ||||||||||||||||||||||||||||||
| (Dollars in thousands, except for per share amounts) | ||||||||||||||||||||||||||||||
| Fiscal 2019 | Fiscal 2020 | |||||||||||||||||||||||||||||
| Q1 | Q2 | Q3 | Q4 | TOTAL | Q1 | Q2 | Q3 | Q4 | TOTAL | |||||||||||||||||||||
| Adjusted Earnings (Loss) (1) | ||||||||||||||||||||||||||||||
| Net (Loss) Earnings (GAAP Measure) | $ | (17,452 | ) | $ | 2,753 | $ | 32,418 | $ | (266,864 | ) | $ | (249,145 | ) | $ | 2,121 | $ | 2,162 | $ | (4,999 | ) | $ | 1,439 | $ | 723 | ||||||
| Discontinued Operations, net of income tax | (1,029 | ) | 1,988 | 5,560 | (263,731 | ) | (257,212 | ) | (4,251 | ) | (1,756 | ) | (69 | ) | 1,242 | (4,834 | ) | |||||||||||||
| (Loss) Earnings from Continuing Operations | $ | (16,423 | ) | $ | 765 | $ | 26,858 | $ | (3,133 | ) | $ | 8,067 | $ | 6,372 | $ | 3,918 | $ | (4,930 | ) | $ | 197 | $ | 5,557 | |||||||
| Impairment & divestiture charges | 23,477 | 3,543 | (12,988 | ) | 8,796 | 22,827 | (1,356 | ) | (768 | ) | (1,443 | ) | 408 | (3,159 | ) | |||||||||||||||
| Restructuring & other exit charges | (29 | ) | 46 | 1,115 | 4,842 | 5,973 | 1,972 | 1,929 | 3,292 | 987 | 8,179 | |||||||||||||||||||
| Accelerated debt issuance & modification costs | - | - | 179 | - | 179 | 625 | - | - | 1,041 | 1,666 | ||||||||||||||||||||
| Purchase accounting inventory step-up charge | - | - | - | - | - | - | 202 | 201 | - | 403 | ||||||||||||||||||||
| Depreciation & amortization true up | - | - | 1,704 | - | 1,704 | - | - | - | - | - | ||||||||||||||||||||
| Pension curtailment | - | - | - | - | - | - | - | - | (758 | ) | (758 | ) | ||||||||||||||||||
| Net tax effect of reconciling items above | (61 | ) | (194 | ) | (2,405 | ) | (464 | ) | (3,124 | ) | (52 | ) | (57 | ) | (624 | ) | (503 | ) | (1,236 | ) | ||||||||||
| Other income tax expense (benefit) | - | 3,160 | 3,076 | 2,709 | 8,945 | - | (74 | ) | - | - | (74 | ) | ||||||||||||||||||
| Adjusted Earnings (Loss) from Continuing Operations (2) | $ | 6,964 | $ | 7,320 | $ | 17,539 | $ | 12,750 | $ | 44,571 | $ | 7,561 | $ | 5,150 | $ | (3,504 | ) | $ | 1,372 | $ | 10,578 | |||||||||
| Adjusted Diluted Earnings (loss) per share (1) | ||||||||||||||||||||||||||||||
| Net (Loss) Earnings (GAAP Measure) | $ | (0.29 | ) | $ | 0.04 | $ | 0.52 | $ | (4.38 | ) | $ | (4.04 | ) | $ | 0.03 | $ | 0.04 | $ | (0.08 | ) | $ | 0.02 | $ | 0.01 | ||||||
| Discontinued Operations, net of income tax | (0.02 | ) | 0.03 | 0.09 | (4.33 | ) | (4.18 | ) | (0.07 | ) | (0.03 | ) | 0.00 | 0.02 | (0.08 | ) | ||||||||||||||
| (Loss) Earnings from Continuing Operations | $ | (0.27 | ) | $ | 0.01 | $ | 0.43 | $ | (0.05 | ) | $ | 0.13 | $ | 0.11 | $ | 0.06 | $ | (0.08 | ) | $ | 0.00 | $ | 0.09 | |||||||
| Impairment & divestiture charges, net of tax effect | 0.38 | 0.06 | (0.21 | ) | 0.11 | 0.34 | (0.02 | ) | (0.01 | ) | (0.02 | ) | 0.00 | (0.04 | ) | |||||||||||||||
| Restructuring & other exit charges, net of tax effect | 0.00 | 0.00 | (0.01 | ) | 0.10 | 0.09 | 0.02 | 0.04 | 0.04 | 0.02 | 0.11 | |||||||||||||||||||
| Accelerated debt issuance & modification costs, net of tax effect | - | - | 0.01 | - | 0.01 | 0.01 | - | - | 0.01 | 0.02 | ||||||||||||||||||||
| Purchase accounting inventory step-up charge, net of tax effect | - | - | - | - | - | - | 0.00 | 0.00 | - | 0.01 | ||||||||||||||||||||
| Depreciation & amortization true up, net of tax effect | - | - | 0.02 | - | 0.02 | - | - | - | - | - | ||||||||||||||||||||
| Pension curtailment, net of tax effect | - | - | - | - | - | - | - | - | (0.01 | ) | (0.01 | ) | ||||||||||||||||||
| Other income tax expense (benefit) | - | 0.05 | 0.05 | 0.05 | 0.14 | - | 0.00 | - | - | - | ||||||||||||||||||||
| Adjusted Diluted Earnings (Loss) per share from Continuing Operations (2) | $ | 0.11 | $ | 0.12 | $ | 0.29 | $ | 0.21 | $ | 0.73 | $ | 0.12 | $ | 0.09 | $ | (0.06 | ) | $ | 0.02 | $ | 0.18 | |||||||||
| Note: The summation of the individual components may not equal the total due to rounding and the impact of share dilution on the<br> calculation of the net loss per share and discontinued operations per share. | ||||||||||||||||||||||||||||||
| (1) Adjusted earnings (loss) from continuing operations and adjusted diluted earnings (loss) per share represent net earnings (loss) and diluted earnings (loss) per share per the<br> 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 accounting principles (GAAP) and should not<br> 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 to investors for understanding the operating<br> results of the current portfolio of Enerpac Tool Group companies. | ||||||||||||||||||||||||||||||
| (2) Q3 Fiscal 2020 results included an adjusted loss from continuing operations, therefore adjusted loss per share is not diluted and is, instead,<br> calculated with basic shares. |
Contacts
Barb Bolens
EVP and Chief Strategy Officer
262.293.1562