ENERPAC TOOL GROUP CORP

Previous wording

Enerpac Tool Group Corp. is a premier industrial tools, services, technology, and solutions provider serving a broad and diverse set of customers and end markets for mission-critical applications in more than 100 countries. Enerpac Tool Group's businesses are global leaders in providing 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 Milwaukee, Wisconsin. The Company has one reportable segment, the Industrial Tools & Service Segment ("IT&S"), and an Other operating segment, which does not meet the criteria to be considered a reportable segment. The IT&S segment is primarily engaged in the design, manufacture and distribution of branded hydraulic and mechanical tools and in providing services and tool rental to the refinery/petrochemical; general industrial; industrial maintenance, repair and operations (“MRO”), machining & manufacturing; power generation, infrastructure, mining and other markets. Financial information related to the Company's reportable segment is included in Note 11,“Segment Information” in the notes to the condensed consolidated financial statements.

Current wording

Enerpac Tool Group Corp. is a premier industrial tools, services, technology, and solutions provider serving a broad and diverse set of customers and end markets for mission-critical applications in more than 100 countries. Enerpac Tool Group's businesses are global leaders in providing 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 Milwaukee, Wisconsin. The Company has one reportable segment, the Industrial Tools & Service Segment ("IT&S"), and an Other operating segment, which does not meet the criteria to be considered a reportable segment. The IT&S segment is primarily engaged in the design, manufacture and distribution of branded hydraulic and mechanical tools and in providing services and tool rental to the general industrial; refining and petrochemical; industrial maintenance, repair and operations (“MRO”), machining & manufacturing; power generation, infrastructure, mining and other markets. Financial information related to the Company's reportable segment is included in Note 11,“Segment Information” in the notes to the condensed consolidated financial statements.

Previous wording

Consolidated net sales for the three months ended November 30, 2025 were $144 million, a decrease of $1 million, or 1%, compared to the prior-year comparable period. The effect of the weakening U.S. dollar on foreign currency rates compared to the prior-year period favorably impacted sales by $3 million, or 2%. This resulted in an organic sales decline of approximately 2% in the quarter. Management refers to sales adjusted to exclude the impact of foreign currency changes and recent acquisitions and divestitures as "organic sales". In the three months ended November 30, 2025, product sales grew $7 million, or 7%, while foreign currency favorably impacted sales by $2 million, or 2%, resulting in organic product sales growth of 5% over the prior-year quarter. Service sales were down $8 million, or 25%, year-over-year, with a favorable impact of foreign currency of $1 million, or 2%, resulting in an organic service sales decline of 26%. Gross profit as a percent of sales decreased to 50.7%, compared to 51.4% in the first quarter of fiscal 2025; the decrease in gross profit margin is due to continued pressure in our service business, primarily in the United Kingdom market, and higher tariff-driven costs flowing through cost of goods sold. Operating profit for the first quarter of fiscal year 2026 was $28 million, a decrease of $3 million compared to the first quarter of fiscal 2025. The decrease in operating profit was mainly driven by the declines in our service business, primarily in the United Kingdom market, and higher tariff-driven costs flowing through cost of goods sold.

Current wording

Consolidated net sales for the three months ended February 28, 2026 were $155 million, an increase of $9 million, or 6%, compared to the prior-year comparable period. The effect of the weakening U.S. dollar on foreign currency rates compared to the prior-year period favorably impacted sales by $6 million, or 4%. This resulted in an organic sales increase of approximately 2% in the quarter. Management refers to sales adjusted to exclude the impact of foreign currency changes and recent acquisitions and divestitures as "organic sales". In the three months ended February 28, 2026, product sales grew $13 million, or 11%, year-over-year, while foreign currency favorably impacted product sales by $5 million, or 4%, resulting in organic product sales growth of 6% overthe prior-year quarter. Service sales were down$8 million, or 13%, year-over-year, with a favorable impact of foreign currency of$1 million, or 4%, resulting in an organic service sales decline of 17%. Gross profit as a percent of sales decreased to 46.4%, compared to 50.5% in the second quarter of fiscal 2025; the decrease in gross profit margin is due to continued pressure in our service business, primarily in the EMEA region, as well as restructuring costs. Operating profit for the second quarter of fiscal year 2026 was $25 million, a decrease of $6 million compared to the second quarter of fiscal 2025. The decrease in operating profit was mainly driven by the declines in our service business, as well as restructuring costs recorded in the current-year period.

Previous wording

The IT&S segment is a global supplier of branded hydraulic and mechanical tools and services to a broad array of end markets, including refinery/petrochemical; general industrial; industrial MRO; machining & manufacturing; power generation; infrastructure; mining; and other markets. Its primary products include branded tools, cylinders, pumps, hydraulic torque wrenches, highly engineered heavy lifting technology solutions and other tools (Product product line). The segment provides maintenance and manpower services to meet customer-specific needs and rental capabilities for certain of our products (Service & Rental product line). The following table sets forth the results of operations for the IT&S segment (dollars in millions):

Current wording

The IT&S segment is a global supplier of branded hydraulic and mechanical tools and services to a broad array of end markets, including general industrial; refining and petrochemical; industrial MRO; machining & manufacturing; power generation; infrastructure; mining; and other markets. Its primary products include branded tools, cylinders, pumps, hydraulic torque wrenches, highly engineered heavy lifting technology solutions and other tools (Product product line). The segment provides maintenance and manpower services to meet customer-specific needs and rental capabilities for certain of our products (Service & Rental product line). The following table sets forth the results of operations for the IT&S segment (dollars in millions):

Previous wording

IT&S segment net sales for the first quarter of fiscal 2026 decreased by$2 million, or 2%, compared to the first quarter of fiscal 2025. The weakening of the U.S. dollar on foreign currency rates compared to three months ended November 30, 2024 favorably impacted sales by$3 million, or 2%. This resulted in an organic sales decline of$5 million, or 3%, in the quarter. The organic sales decrease is driven by activity declines in our service business, partially offset by growth in our product business. Service sales were down$8 million, or 25%, year-over-year, with a favorable impact of foreign currency of $1 million, or 2%, resulting in an organic service sales decline of 26%. Product sales were up$6 million, or 6%, year-over-year, with a favorable impact of foreign currency of$2 million, or 2%, resulting in organic product sales growth of 4%. Operating profit for the three months ended November 30, 2025 was$36 million, compared to$38 million in the same period of the prior year. The decrease in operating profit was mainly driven by the declines in our service business, primarily in the United Kingdom market, and higher tariff-driven costs flowing through cost of goods sold.

Current wording

IT&S segment net sales for the first half of fiscal 2026 increased by $6 million, or 2%, compared to the first half of fiscal 2025. The weakening of the U.S. dollar on foreign currency rates compared to the six months ended February 28, 2025 favorably impacted sales by $9 million, or 3%. This resulted in an organic sales decline of $3 million, or 1%. The organic sales decrease is driven by activity declines in our service business, partially offset by growth in our product business. Service sales were down $12 million, or 19%, year-over-year, with a favorable impact of foreign currency of $2 million, or 3%, resulting in an organic service sales decline of 22%. Product sales were up $17 million, or 8%, year-over-year, with a favorable impact of foreign currency of $7 million, or 3%, resulting in organic product sales growth of 5%. The organic sales increase was due to tariff related actions and increased demand. Operating profit for the six months ended February 28, 2026 was $67 million, compared to $77 million in the same period of the prior year. The decrease in operating profit was mainly driven by the declines in our service business, higher tariff-driven costs flowing through cost of goods sold, as well as restructuring costs recorded in the current-year period.

Previous wording

Corporate expenses were $9 million and $8 million for the three months ended November 30, 2025 and 2024, respectively. The increase in expense was driven by higher personnel charges and growth investments.

Current wording

Corporate expenses were $8 million in both the three months ended February 28, 2026 and 2025. Corporate expenses were $18 million and $17 million for the six months ended February 28, 2026 and 2025, respectively. The increase in expense was driven by higher personnel charges and growth investments.

Previous wording

Net financing costs were $2 million and $3 million in the three months ended November 30, 2025 and 2024, respectively. Financing costs decreased due to lower debt balances and interest rates.

Current wording

Net financing costs were $2 million in both the three months ended February 28, 2026 and 2025 and $4 million and $5 million in the six months ended February 28, 2026 and 2025, respectively. Financing costs decreased due to lower debt balances and interest rates.

Previous wording

The effective tax rate for the three months ended November 30, 2025 was 25.1%, compared to 22.1% for the comparable prior-year period. The effective tax rate in each time period was impacted by year-to-date losses and deductions in jurisdictions where no tax benefit can be realized. The higher effective tax rate for the three months ended November 30, 2025 was primarily driven by the more favorable tax impact of stock compensation in the prior period as compared to the current period. Both the current and prior-year period effective income tax rates include the impact of non-recurring items.

Current wording

The effective tax rate for the three months ended February 28, 2026 was 26.3%, compared to 24.5% for the comparable prior-year period. The effective tax rate in each time period was impacted by year-to-date losses and deductions in jurisdictions where no tax benefit can be realized. The higher effective tax rate for the three months ended February 28, 2026 was primarily driven by the more favorable tax impact of stock compensation in the prior period as compared to the current period. Both the current and prior-year period effective income tax rates include the impact of non-recurring items.

Previous wording

At November 30, 2025, we had $139 million of cash and cash equivalents, of which $100 million was held by our foreign subsidiaries and $39 million was held domestically. The following table summarizes our cash flows provided by operating, investing and financing activities (dollars in millions):

Current wording

At February 28, 2026, we had $99 million of cash and cash equivalents, of which $90 million was held by our foreign subsidiaries and $9 million was held domestically. The following table summarizes our cash flows provided by operating, investing and financing activities (dollars in millions):

Previous wording

Net cash provided by oper ating activities was $16 million and $9 million for the three months ended November 30, 2025 and 2024, respectively. The $7 million year-over-year variance is primarily driven by the timing of milestone payments on contracts where revenue is recognized over time.

Current wording

Net cash provided by operating activities was $29 million and $16 million for the six months ended February 28, 2026 and 2025, respectively. The $13 million year-over-year variance is primarily driven by the timing of payments and increases in contract liabilities.

Previous wording

Net cash used in investing activities was $4 million and $33 million for the three months ended November 30, 2025 and 2024, respectively. This decreased use of cash was primarily due to the $27 million payment made for the DTA acquisition in the first quarter of fiscal 2025.

Current wording

Net cash used in investing activities was $7 million and $39 million for the six months ended February 28, 2026 and 2025, respectively. This decreased use of cash was primarily due to the $27 million payment made for the DTA acquisition in the first quarter of fiscal 2025 and the decrease in capital expenditures in the current year after the prior year increase from the headquarter move during fiscal 2025.

Previous wording

Net cash used in financing activities was $23 million and $13 million for the three months ended November 30, 2025 and 2024, respectively. The $10 million increase in net cash used in financing activities for the three months ended November 30, 2025 was driven by higher share repurchases in the current-year period.

Current wording

Net cash used in financing activities was $75 million and $25 million for the six months ended February 28, 2026 and 2025, respectively. The $50 million increase in net cash used in financing activities for the six months ended February 28, 2026 was driven by higher share repurchases in the current-year period.

Previous wording

At November 30, 2025, there were no borrowings and $400 million available under the revolving line of credit facility. The Company was in compliance with all covenants under the senior credit facility at November 30, 2025.

Current wording

At February 28, 2026, there were no borrowings and $399 million available under the revolving line of credit facility. The Company was in compliance with all covenants under the senior credit facility at February 28, 2026.