Enerpac Tool Group Corp (EPAC) Reports Strong Q4 and Full-Year Results
Net sales for FY 2023 reached $598 million, marking a 5% increase with core sales growth of 8%.
Adjusted EBITDA for the same period was $136 million, a significant 65% increase year over year.
Q4 of FY 2023 saw net sales of $161 million, a 6% growth compared to the prior year, with a 9% increase in core sales.
The company returned $58 million to shareholders through the repurchase of 2.2 million shares.
On October 16, 2023, Enerpac Tool Group Corp (NYSE:EPAC) released its earnings report for the fiscal year and the fourth quarter ended August 31, 2023. The company reported strong performance with significant increases in net sales and adjusted EBITDA for the fiscal year 2023.
Fiscal Year 2023 Performance
For the fiscal year 2023, Enerpac Tool Group Corp (NYSE:EPAC) reported net sales of $598 million, marking a 5% increase with core sales growth of 8%. The operating margin was 14.0% and adjusted operating margin was 20.5%. Net earnings were $54 million, or $0.94 per diluted share. The company also generated operating cash flow of $78 million and free cash flow of $70 million, marking a 57% increase year over year.
Fourth Quarter Performance
For the fourth quarter of fiscal 2023, the company reported net sales of $161 million, a 6% growth compared to the prior year, with a 9% increase in core sales. The operating margin was 20.0% and adjusted operating margin was 23.0%. Net earnings were $23 million, or $0.41 per diluted share.
Company Commentary
We are extremely pleased with Enerpacs performance in fiscal 2023, said Paul Sternlieb, Enerpac Tool Groups President & CEO. We generated revenue and free cash flow at the high end of our guidance range, while adjusted EBITDA well outpaced our expectations. We were equally pleased with the benefit of our ASCEND transformation program. In fiscal 2023, the first full year of the program, we achieved our targeted adjusted EBITDA benefits a year ahead of plan and remain on track to attain our 25% adjusted EBITDA margin target by fiscal 2025. Through permanent change across the organization, we are making Enerpac more efficient, more productive, and easier to do business with.
Financial Tables Summary
The financial tables provided in the earnings report show a detailed breakdown of the company's performance. For the fiscal year 2023, consolidated net sales were $598.2 million, compared to $571.2 million in fiscal 2022. Core sales increased 8% year over year. Operating profit increased 174% year over year to $83.9 million, with an operating profit margin of 14.0%, up from 5.4% in fiscal 2022.
Outlook
Despite the uncertainties in the macro environment, Enerpac Tool Group Corp (NYSE:EPAC) remains confident in its ability to outperform the industry and gain share. The company set its full-year fiscal 2024 net sales guidance range at $590 million to $605 million, with core growth of approximately 2 to 4 percent, adjusted EBITDA guidance at $142 million to $152 million, and anticipated free cash flow of $60 million to $70 million.
This article first appeared on GuruFocus.
