ENERPAC TOOL GROUP CORP

Note 1. Summary of Significant Accounting Policies

Nature of Operations: Enerpac Tool Group Corp. (the “Company”) is a premier industrial tools, services, technology and solutions company serving a broad and diverse set of customers in more than 100 countries. The Company hasone reportable segment, Industrial Tools & Services (“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 MRO; machining & manufacturing; power generation; infrastructure; mining and other markets.

Consolidation and Presentation: The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly owned. The results of companies acquired or disposed of during the year are included in the consolidated financial statements from the effective date of acquisition or until the date of divestiture. All intercompany balances, transactions and profits have been eliminated in consolidation. The terms “the Company,” “we,” and “our” refer to Enerpac Tool Group Corp. and its subsidiaries, unless the context requires that such terms refer only to Enerpac Tool Group Corp. References to fiscal years, such as “fiscal 2026,” are to the fiscal year ending on August 31 of the specified year.

Cash Equivalents: The Company considers all highly liquid investments with orig inal maturities of 90 days or less to be cash equivalents.

Inventories: Inventories are comprised of material, direct labor and manufacturing overhead. A portion of inventory is recorded on the first-in, first-out or average cost method and is stated at the lower of cost or net realizable value. A portion of U.S. owned inventory is determined using the last-in, first-out (“LIFO”) method (46.6% and 47.3% of total inventories as of August 31, 2026 and 2025, respectively). If the LIFO method were not used, inventory balances would be higher than reported amounts in the consolidated balance sheets by $17.0 million and $18.1 million at August 31, 2026 and 2025, respectively. During the fiscal year ended August 31, 2026, the Company experienced a liquidation of LIFO inventory layers, which resulted in a decrease in cost of goods sold and a corresponding increase in pre-tax income of approximately $1.7 million. This increase in income is attributable to the liquidation of inventory carried at lower historical costs.

The nature of the Company’s products is such that they generally have a very short production cycle. Consequently, the amount of work-in-process at any point in time is minimal. In addition, many parts or components are ultimately either sold individually or assembled with other parts making a distinction between raw materials and finished goods impractical to determine. Certain locations maintain and manage their inventories using a job cost system where the distinction of categories of inventory by state of completion is also not available. As a result of these factors, it is neither practical nor cost effective to segregate the amounts of raw materials, work-in-process or finished goods inventories at the respective balance sheet dates, as segregation would only be possible as the result of physical inventories which are taken at dates different from the balance sheet dates.

Property, Plant and Equipment: Property, plant and equipment are stated at cost. Plant and equipment are depreciated on a straight-line basis over the estimated useful lives of the assets, ranging fromten toforty years for buildings and improvements andtwo tofifteen years for machinery and equipment. Equipment includes assets which are rented to customers of the IT&S segment. Leasehold improvements are amortized over the shorter of the life of the related asset or the term of the lease. Depreciation expense was $11.2 million, $10.1 million and $10.0 million for the years ended August 31, 2026, 2025 and 2024, respectively. The following is a summary of the Company's components of property, plant and equipment:

Leases: We determine if an arrangement contains a lease in whole or in part at the inception of the contract and identify classification of the lease as financing or operating. We account for the underlying operating lease asset at the individual lease level. Operating leases are recorded as operating lease right-of-use (“ROU”) assets in “Other long-term assets” and operating lease liabilities in “Other current liabilities” and “Other long-term liabilities” on the Consolidated Balance Sheets.

All leases greater than 12 months result in recognition of a ROU asset and a liability at the lease commencement date and are recorded at the present value of the future minimum lease payments over the lease term. The lease term is equal to the initial term at commencement plus any renewal or extension options that the Company is reasonably certain will be exercised. ROU assets at the date of commencement are equal to the amount of the initial lease liability, the initial direct costs incurred by the Company and any prepaid lease payments less any incentives received. Lease expense for operating leases is recognized on a straight-line basis over the lease term or remaining useful life. As most of our leases do not provide the information required to determine the implicit rate, we utilize a consolidated group incremental borrowing rate for all leases as the Company has centralized treasury operations. The incremental borrowing rate is derived through a combination of inputs such as the Company's credit rating, impact of collaborated borrowing capabilities and lease term.

Leases with the duration of less than one-year are not recognized on the balance sheet and are expensed on a straight-line basis over the lease term. In addition, we do not separate lease components from non-lease components for all asset classes.

Goodwill and Other Intangible Assets: Goodwill and other intangible assets with indefinite lives are not subject to amortization, but are subject to annual impairment testing. Other intangible assets with definite lives, consisting primarily of purchased customer relationships, patents, trademarks and tradenames, are amortized over periods from one to twenty-five years.

The Company’s goodwill is tested for impairment annually during the fourth quarter, or more frequently if events or changes in circumstances indicate that goodwill might be impaired. In conducting the annual impairment test for goodwill, the Company first assesses qualitative factors to determine whether it is more likely than not (greater than 50% likelihood) the fair value of any reporting unit is less than its carrying amount. If a qualitative assessment determines an impairment is more likely than not, we are required to perform a quantitative impairment test. Otherwise, no further analysis is required. Alternatively, we may elect to proceed directly to the quantitative impairment test. When a quantitative test is deemed necessary, the Company estimates fair value for its reporting units using a fair value method based on management’s judgments and assumptions. In estimating the fair value, the Company utilizes a discounted cash flow model, which is dependent on a number of assumptions, most significantly forecasted revenues and operating profit margins, and the weighted average cost of capital, or a market value approach if appropriate information is available as of the goodwill impairment assessment date. The estimated fair value of the reporting unit is compared to the carrying amount of the reporting unit, including goodwill. If the carrying value of the reporting unit exceeds its fair value, an impairment loss is recorded and should not exceed the total amount of goodwill allocated to the reporting unit. Indefinite-lived intangible assets are also subject to an annual impairment test. On an annual basis, or more frequently if events or changes in circumstances indicate that the asset might be impaired, the fair value of the indefinite-lived intangible assets are evaluated by the Company to determine if an impairment charge is required. A considerable amount of management judgment is required in performing impairment tests, principally in determining the fair value of each reporting unit and the indefinite-lived intangible assets.

Product Warranty Costs: The Company generally offers its customers an assurance warranty on products sold, although warranty periods may vary by product type and application. The reserve for future warranty claims, which is recorded within the “Other current liabilities” line on the Consolidated Balance Sheets, is based on historical claim rates and current warranty cost experience. The following is a roll-forward of the changes in product warranty reserves for fiscal 2026 and 2025:

Revenue from Contracts with Customers: The Company recognizes revenue when it satisfies a performance obligation in a contract by transferring control of a distinct good or service to a customer.

Under normal circumstances, the Company invoices the customer once transfer of control has occurred and has a right to payment. The typical payment terms vary based on the customer and the types of goods and services in the contract. The period of time between invoicing and when payment is due is not significant, as our standard payment terms are less than one year. Amounts billed and due from customers are classified as accounts receivables on the Consolidated Balance Sheets.

Customer sales are recorded net of allowances for returns and discounts, which are recognized as a deduction from sales at the time of sale. The Company commits to one-time or on-going trade discounts and promotions with customers that require the Company to estimate and accrue the ultimate costs of such programs. The Company generally does not require collateral or other security for receivables and provides for an allowance for credit losses based on historical experience and a review of its existing receivables. Accounts receivable are stated net of an allowance for credit losses of$3.0 million and $3.8 million at August 31, 2026 and 2025, respectively. During fiscal 2025 the Company wrote off approximately $12.9 million in credit loss allowances related to charges that were incurred prior to fiscal 2023.

Taxes Collected: Taxes collected by the Company from a customer concurrent with revenue-producing activities are excluded from “Net sales” within the Consolidated Statements of Earnings.

Tariff Refunds: Commencing in April 2025, the U.S. government implemented tariffs of at least 10% on goods imported from nearly all countries pursuant to the International Emergency Economic Powers Act (“IEEPA”). In February 2026, the U.S. Supreme Court ruled that these tariffs imposed under IEEPA were invalid. Subsequently, the U.S. Court of International Trade ruled that the collected tariffs in question must be refunded in accordance with the law. The U.S. government has appealed certain aspects of the Court of International Trade's orders relating to the refund of certain finally liquidated entries. U.S. Customs and Border Protection (“CBP”) has implemented the Consolidated Administration and Processing of Entries (“CAPE”) process to facilitate the submission and processing of valid requests for refunds of IEEPA duties. The Company has initiated the process of requesting refunds for IEEPA tariffs previously paid.

We applied the loss recovery model and determined the expected receipt of the refund of the previously paid IEEPA tariffs is probable. We estimate the amount of the probable refund to be $7.2 million, which was recorded in the year ended August 31, 2026 within “Other current assets” in the Consolidated Balance Sheets and as a reduction to “Cost of products sold” in the Consolidated Statements of Earnings. The net impact of IEEPA tariffs, inclusive of the refund, and the cash received from the refund process, were immaterial during the year ended August 31, 2026.

Shipping and Handling Costs: The Company records costs associated with shipping its products after control over a product has transferred to a customer andare accounted for as fulfillment costs. These costs are reported in the Consolidated Statements of Earnings in “Cost of products sold.”

Research and Development Costs: Research and development costs consist primarily of engineering and development resources and are expensed as incurred. Such costs incurred in the development of new products or significant improvements to existing products were $15.4 million, $14.5 million and $12.4 million in fiscal 2026, 2025 and 2024, respectively. The Company also incurs significant costs in connection with fulfilling custom orders and developing solutions for unique customer needs which are not included in these research and development expense totals.

Other Income/Expense: Other income and expense primarily consists of net foreign currency exchange transaction losses of $1.6 million, $1.6 million and $2.1 million in fiscal 2026, 2025 and 2024, respectively.

Financing Costs: Financing costs represent interest expense, financing fees and amortization of debt issuance costs, net of interest income. Interest income was $1.9 million, $2.3 million and $2.5 million for fiscal 2026, 2025 and 2024, respectively.

Income Taxes: The provision for income taxes includes federal, state, local and non-U.S. taxes on income. Tax credits, primarily for non-U.S. earnings, are recognized as a reduction of the provision for income taxes in the year in which they are available for U.S. tax purposes. Deferred taxes are provided on temporary differences between assets and liabilities for financial and tax reporting purposes as measured by enacted tax rates expected to apply when temporary differences are settled or realized. Future tax benefits are recognized to the extent that realization of those benefits is considered to be more likely than not. A valuation allowance is established for deferred tax assets for which realization is not more likely than not of being realized. The Company's general policy is for non-U.S. subsidiary earnings to be indefinitely reinvested to the extent the remittance results in an incremental U.S. tax liability. However, the Company routinely analyzes the factors surrounding global cash needs and future cash utilization to determine if exceptions exist and establishes deferred tax liabilities for associated future tax costs. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense and treats any taxes due on future U.S. inclusions in taxable income under the Global Intangible Low-Taxed Income (“GILTI”) provision as a current period tax expense.

Foreign Currency Translation: The financial statements of the Company’s foreign operations are translated into U.S. dollars using the exchange rate at each balance sheet date for assets and liabilities and an appropriate weighted average exchange rate for each applicable period within the Consolidated Statements of Earnings. Translation adjustments are reflected in the Consolidated Balance Sheets and Consolidated Statements of Shareholders' Equity caption “Accumulated other comprehensive loss.”

Accumulated Other Comprehensive Loss: The following is a summary of the components included within accumulated other comprehensive loss:

Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles in the United States (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. The Company regularly evaluates the estimates and assumptions related to the allowance for credit losses, inventory valuation, warranty reserves, goodwill, intangible and long-lived asset valuations, employee benefit plan liabilities, over-time revenue recognition, income tax liabilities, deferred tax assets and related valuation allowances, uncertain tax positions, restructuring reserves, and litigation and other loss contingencies.

The Company manages the profitability of its product and service & rental categories on a combined basis given the complexity of the business model. This model includes providing integrated product and service solutions resulting in facilities that generate revenues from both product and service & rental categories, which also have indirect and facility overhead costs included in cost of sales. As such, judgment and estimates are required to disaggregate product and service & rental cost of sales including allocating indirect and facility overhead costs between cost of product sales and the cost of service & rental sales. Changes in these judgments and estimates could materially change the allocation of the indirect and facility overhead costs to the different sales categories and the resulting ratio of cost of sales to net sales by category. Because the sales mix heavily favors the product category, a change in the mix of cost of sales between the sales categories would have a more significant impact on the ratio of cost of sales to net sales for the service & rental category.

Recently Adopted Accounting Pronouncements

Effective August 31, 2026, the Company adopted Accounting Standards Update 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”) on a prospective basis. This ASU establishes new income tax disclosures to consistently categorize and provide greater disaggregation of information in the rate reconciliation, including dollar value and percentage impacts of each component of the reconciliation, as well as further disaggregates income taxes paid. This guidance is effective for fiscal years beginning after December 15, 2024, and interim periods thereafter. The adoption did not affect the Company’s financial position, results of operations or cash flows as the standard only impacts financial statement footnote disclosures (see Note 13, “Income Taxes” for further information).

Recently Issued Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2024-03 “Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses” (“ASU 2024-03”), which is intended to improve disclosures about a public business entity's expenses, primarily through additional disaggregation of income statement expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. The Company is evaluating the impact of the adoption of ASU 2024-03 on the consolidated financial statements.

In September 2025, the FASB issued Accounting Standards Update 2025-06 “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software” (ASU 2025-06), which replaces the stage-based capitalization model for the treatment of development costs of internal-use software with a principles-based framework, reflecting modern software development practices. In addition, ASU 2025-06 requires companies to capitalize software costs once management authorizes and commits to funding with probable completion and use. This guidance will be effective for annual reporting periods beginning after December 15, 2027, and for interim periods within annual reporting periods within those annual reporting periods, and allows multiple transition methods, including retrospective, prospective, or modified prospective application, with early adoption permitted. The Company is evaluating the impact of the adoption of ASU 2025-06 on the consolidated financial statements.

In December 2025, the FASB issued Accounting Standards Update 2025-11, “Interim Reporting (Topic 270): Narrow-scope improvements” (ASU 2025-11). The amendments clarify the scope, form, and content of interim financial statement disclosures and improve the navigability of Topic 270 without changing existing interim reporting requirements. The Company is currently evaluating the impact that the adoption of ASU 2025-11 will have on its condensed consolidated financial statements and related disclosures. ASU 2025-11 is effective for interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that the adoption of ASU 2025-11 will have on its interim financial reporting and related disclosures.

Note 2. Revenue from Contracts with Customers

Nature of Goods and Services

The Company generates its revenue under two principal activities, which are discussed below:

Product Sales: Sales of tools, heavy-lifting solutions, and rope solutions are recorded when control is transferred to the customer (i.e., performance obligation has been satisfied). For the majority of the Company’s product sales, revenue is recognized at a point in time when control of the product is transferred to the customer, which generally occurs when the product is shipped from the Company to the customer. For certain other products that are highly customized and have a limited alternative use, and for which the Company has an enforceable right of reimbursement for performance completed to date, revenue is recognized over time. We consider the input measure (efforts-expended or cost-to-cost) or output measure as a fair measure of progress for the recognition of over-time revenue associated with these custom products. For a majority of these customized products, machine hours and labor hours (efforts-expended measurement) are used as a measure of progress.

Service & Rental Sales: Service contracts consist of providing highly trained technicians to perform bolting, technical services, machining and joint-integrity work for our customers. These revenues are recognized over time as our customers simultaneously receive and consume the benefits provided by the Company. We consider the input measure (efforts-expended or cost-to-cost) or output measure as a fair measure of progress for the recognition of over-time revenue associated with service contracts. For a majority of the Company’s service contracts, labor hours (efforts-expended measurement) is used as the measure of progress when it is determined to be a better depiction of the transfer of control to the customer due to the timing and pattern of labor hours incurred. Revenue from rental contracts (less than one year and non-customized products) is generally recognized ratably over the contract term, depicting the customer’s consumption of the benefit related to the rental equipment.

Disaggregated Revenue and Performance Obligations

The Company disaggregates revenue from contracts with customers by reportable segment and product line and by the timing of when goods and services are transferred. See Note 16,“Business Segment, Geographic and Customer Information” for information regarding our revenue disaggregation by reportable segment and product line.

The following table presents information regarding revenues disaggregated by the timing of when goods and services are transferred:

Contract Balances

The Company's contract assets and liabilities are recorded as follows:

Accounts Receivable: The Company performs its obligations under a contract with a customer by transferring goods or services in exchange for consideration from the customer. The Company typically invoices its customers as soon as control of an asset is transferred and a receivable for the Company is established. Accounts receivable, net is recorded at face amount of customer receiva bles less an allowance for credit losses. The Company maintains an allowance for credit losses for expected losses as a result of customers’ inability to make required payments. Management evaluates the aging of customer receivable balances, the financial condition of its customers, historical trends and the time outstanding of specific balances to estimate the amount of receivables that will not be collected in the future and records the appropriate provision. The allowance for credit losses was$3.0 million and$3.8 million at August 31, 2026 and 2025, respectively.

Contract Assets: Contract assets relate to the Company’s rights to consideration for work completed but not billed as of the reporting date on contracts with customers. The contract assets are transferred to receivables when the rights become unconditional. The Company has contract assets on contracts that are generally long-term and have revenues that are recognized over time.

Contract Liabilities: As of August 31, 2026, the Company had certain contracts where there were unsatisfied performance obligations and the Company hadreceived cash consideration from customers before the performance obligations were satisfied. The majority of these contracts relate to long-term customer contracts (project durations of greater than three months) and are recognized over time. The Company estimates that$4.9 million will be recognized in net sales from satisfying those performance obligations within the next twelve months.

Timing of Performance Obligations Satisfied at a Point in Time: The Company evaluates when the customer obtains control of the product based on shipping terms, as control will transfer, depending upon such terms, at different points between the Company's manufacturing facility or warehouse and the customer’s location. The Company considers control to have transferred upon shipment or delivery because (i) the Company has a present right to payment at that time; (ii) the legal title has been transferred to the customer; (iii) the Company has transferred physical possession of the product to the customer; and (iv) the customer has significant risks and rewards of ownership of the product.

Variable Consideration: The Company estimates whether it will be subject to variable consideration under the terms of the contract and includes its estimate of variable consideration in the transaction price based on the expected value method when it is deemed probable of being realized based on historical experience and trends. Types of variable consideration may include rebates, incentives and discounts, among others, which are recorded as a reduction to net sales at the time when control of a performance obligation is transferred to the customer.

Practical Expedients & Exemptions: The Company elected to expense the incremental cost to obtaining a contract when the amortization period for such contracts would be one year or less. The Company does not disclose the value of unperformed obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which it recognizes revenue at the amount to which it has the right to invoice for services performed.

Note 3. ASCEND Transformation Program

In March 2022, the Company announced the start of its ASCEND transformation program. ASCEND’s key initiatives included accelerating organic growth strategies, improving operational excellence and production efficiency by utilizing a Lean approach, and driving greater efficiency and productivity in selling, general and administrative (“SG&A”) expense by better leveraging resources to create a more efficient and agile organization.

The following summarizes ASCEND transformation charges:

The ASCEND program was completed as of August 31, 2024, with total program costs of $74.7 million, of which $18.6 million was restructuring charges. The restructuring charges incurred were predominately severance and other employee-related costs (see Note 4,“Restructuring Charges”).

Note 4. Restructuring Charges

The Company has undertaken or committed to various restructuring initiatives, including workforce reductions, leadership changes, plant consolidations to reduce manufacturing overhead, satellite office closures, the continued movement of production and product sourcing to low-cost alternatives and the centralization and standardization of certain administrative functions. Liabilities for severance are generally to be paid within twelve months, while future lease payments related to facilities vacated as a result of restructuring are to be paid over the underlying remaining lease terms.

On June 27, 2022, the Company approved a restructuring plan in connection with the initiatives identified as part of the ASCEND transformation program(see Note 3, “ASCEND Transformation Program”) to drive greater efficiency and productivity in global selling, general and administrative resources. The costs of this plan were predominately severance and other employee-related costs incurred as cash expenditures and impacting both IT&S and Corporate.

For the year ended August 31, 2024, the Company recorded $7.8 million, of restructuring charges associated with the ASCEND transformation program, inclusive of the Other Segment. No restructuring charges associated with the ASCEND transformation program were recorded for the year ended August 31, 2026 or 2025 as the ASCEND program ended at August 31, 2024, with a total restructuring charge of $18.6 million.

The following summarizes ASCEND restructuring reserve activity for the IT&S segment and Corporate:

During the third quarter of fiscal 2025, in light of the soft market conditions and as another step towards increasing efficiency of its selling, general and administrative spend, the Company incurred restructuring costs of$5.9 million, of which approximately three quarters was related to personnel actions and the remainder were charges associated with the Company's former headquarters location (the “FY25 Restructuring Plan”).

The following summarizes FY25 Restructuring Plan restructuring reserve activity for the IT&S segment and Corporate:

In the second quarter of fiscal 2026, the Company announced a new restructuring plan rightsizing our Hydratight service operation in the IT&S segment and reducing headcount in the segment to align with current market conditions, primarily in the EMEA Region (the “FY26 Restructuring Plan”). The restructuring is also designed to support our strategic transition of the IT&S segment toward a higher margin service business and growth objectives. In connection with the announcement of this plan, the Company recorded $3.3 million of restructuring costs in the year ended August 31, 2026.

The following summarized reserve activity related to the FY26 Restructuring Plan for the IT&S segment:

Note 5. Acquisitions

On September 4, 2024, the Company acquired 100% of the stock of DTA The Smart Move, S.A. (“DTA”), a global leader in the industrial heavy loads transportation industry, designing and manufacturing mobile robotic solutions. The acquisition provides a complement to Enerpac's Heavy Lifting Technology product line and combines the Company's existing focus on vertical lift with DTA's specialization in horizontal movement enabling the Company to provide more comprehensive solutions for customers. The Company acquired all of the assets and assumed certain liabilities of DTA for an initial purchase price of $26.7 million plus potential earn-out of €12.0 million to be paid at the end of the third year following the acquisition that is contingent upon the achievement of certain financial objectives. The Company finalized the fair value of assets and liabilities acquired as of August 31, 2025. There were no material adjustments to the preliminary fair value allocation upon finalization.

Management has estimated the fair value of the earn-out liability to be €2.9 million and €2.5 million as of August 31, 2026 and 2025, respectively. The contingent consideration is payable at the end of the third year following the acquisition and is based on the achievement of specified financial targets. The Company is required to remeasure the fair value of the contingent consideration at each reporting date, with changes in fair value recognized in earnings. The Company used the Black-Scholes model to determine the fair value remeasurement of the potential earn-out payment. The significant assumptions used to remeasure the value of the potential earn-out included the forecasted gross profit and the discount rate. These significant assumptions are forward-looking and could be affected by future economic and market conditions.

See Note 18, “Subsequent Events” for further information on the Company's acquisition of Specialized Fabrication Equipment Group LLC.

Note 6. Discontinued Operations and Other Divestiture Activities

Discontinued Operations

On October 31, 2019, as part of our overall strategy to become a pure-play industrial tools and services company, the Company completed the sale of the businesses comprising its former EC&S segment. This divestiture was considered part of our strategic shift to become a pure-play industrial tools and services company, and therefore, the results of operations are recorded as a component of “Earnings (loss) from discontinued operations, net of income taxes” in the Consolidated Statements of Earnings for all periods presented. All discontinued operations activity included within the Consolidated Statements of Earnings and the Consolidated Statements of Cash Flows for the periods presented relate to impacts from certain retained liabilities.

The following represents the detail of “Earnings from discontinued operations, net of income taxes” within the Consolidated Statements of Earnings:

Note 7. Goodwill, Intangible Assets and Long-Lived Assets

Changes in the gross carrying value of goodwill and intangible assets result from changes in foreign currency exchange rates, business acquisitions, divestitures and impairment charges. The changes in the carrying amount of goodwill for the years ended August 31, 2026 and 2025 by operating segment are as follows:

The gross carrying value and accumulated amortization of the Company’s intangible assets are as follows:

The Company estimates amortization expense for future years to be: $6.0 million in fiscal 2027, $3.9 million in fiscal 2028, $3.7 million in fiscal 2029, $2.9 million in fiscal 2030, $2.3 million in fiscal 2031, and $2.6 million in aggregate thereafter. The future amortization expense amounts represent estimates and may be impacted by future acquisitions, divestitures or changes in foreign currency exchange rates, among other causes.

In conjunction with our annual goodwill impairment assessment, the Company did not record any charges in fiscal 2026 or 2025.

Note 8. Debt

The following is a summary of the Company’s indebtedness:

Senior Credit Facility

On September 9, 2022, the Company refinanced its previous senior credit facility with a $600 million senior credit facility, comprised of a $400 million revolving line of credit and a $200 million term loan, which was scheduled to mature in September 2027. The Company had the option to request up to $300 million of additional revolving commitments and/or term loans under this facility, subject to customary conditions, including the commitment of the participating lenders. This facility uses adjusted term SOFR as the interest rate benchmark and provides for interest rate margins above adjusted term SOFR ranging from 1.125% to 1.875% per annum depending on the Company’s net leverage ratio. In addition, a non-use fee is payable quarterly on the average unused amount of the revolving line of credit ranging from 0.15% to 0.3% per annum, based on the Company's net leverage. At August 31, 2026, the interest rate on the borrowings under the senior credit facility was adjusted term SOFR plus 1.125% per annum.

On July 7, 2026, pursuant to the provision of the senior credit facility permitting additional revolving commitments and/or term loans, the Company entered into an amendment to the agreement governing the senior credit facility to increase the revolving credit facility thereunder from $400 million to $625 million.

The facility contains financial covenants requiring the Company to not permit (i) the net leverage ratio, determined as of the end of each of its fiscal quarters, to exceed 3.75 to 1.00 (or, at the Company’s election and subject to certain conditions,4.25 to 1.00 for the covenants period during which certain material acquisitions occur and the next succeeding four testing periods) or (ii) the interest coverage ratio, determined as of the end of each of its fiscal quarters, to be less than 3.00 to 1.00. Borrowings under the facility are secured by substantially all personal property assets of the Company and its domestic subsidiary guarantors (other than certain specified excluded assets) and equity interests of certain subsidiaries of the Company. The Company was in compliance with all covenants under the credit facility at August 31, 2026.

At August 31, 2026, there were$182.5 million in borrowings outstanding under the term loans, no borrowings outstanding under the revolving line of credit and$625.0 million available for borrowing under the revolving line of credit facility.

On October 16, 2026, the Company refinanced its senior credit facility resulting in a new$850 million senior credit facility, comprised of a$550 million revolving line of credit and a$300 million term loan, which will mature in October 2031. See Note 18, “Subsequent Events” in the notes to the consolidated financial statements for further details.

Cash Paid for Interest

The Company made cash net interest payments of$7.9 million, $8.8 million and $12.4 million in fiscal 2026, 2025 and 2024, respectively.

Note 9. Fair Value Measurements

The Company assesses the inputs used to measure the fair value of financial assets and liabilities using a three-tier hierarchy. Level 1 inputs include unadjusted quoted prices for identical instruments and are the most observable. Level 2 inputs include quoted prices for similar assets and observable inputs such as interest rates, foreign currency exchange rates, commodity rates and yield curves. Level 3 inputs are not observable in the market and include management’s own judgments about the assumptions market participants would use in pricing an asset or liability.

The fair value of the Company’s cash and cash equivalents, accounts receivable, accounts payable and variable rate long-term debt approximated book value at both August 31, 2026 and 2025 due to their short-term nature and the fact that the interest rates approximated market rates. Foreign currency exchange contracts and interest rate swaps are recorded at fair value. The fair value of the Company's foreign currency exchange contracts was a net liability of $0.1 millionand a net asset of less than$0.1 million at August 31, 2026 and 2025, respectively.

The fair value of the Company's interest rate swap and net investment hedge was an asset of $0.6 million and a liability of $4.5 million at August 31, 2026 and an asset of less than $0.1 million and a liability of $4.7 million at August 31, 2025(see Note 10, “Derivatives” for further information on the Company's interest rate swap and net investment hedge.) The fair values of all derivative contracts were based on quoted inactive market prices and therefore classified as Level 2 within the valuation hierarchy. The contingent consideration associated with the acquisition of DTA is remeasured at fair value at each reporting date. See Note 5, “Acquisitions” for additional information on the underlying inputs and calculation which is classified as Level 3 within the valuation hierarchy.

Note 10. Derivatives

All derivatives are recognized in the balance sheet at their estimated fair value. The Company does not enter into derivatives for speculative purposes. Changes in the fair value of derivatives (not designated as hedges) are recorded in earnings along with the gain or loss on the hedged asset or liability.

The Company is exposed to market risk for changes in foreign currency exchange rates due to the global nature of its operations. In order to manage this risk, the Company utilizes foreign currency exchange contracts to reduce the exchange rate risk associated with recognized non-functional currency balances. The effects of changes in exchange rates are reflected concurrently in earnings for both the fair value of the foreign currency exchange contracts and the related non-functional currency asset or liability. These derivative gains and losses offset foreign currency gains and losses from the related revaluation of non-functional currency assets and liabilities (amounts incl uded in “Other expense, net” in the Consolidated Statements of Earnings). The U.S. dollar equivalent notional value of these short duration foreign currency exchange contracts was$8.3 million and $10.3 million at August 31, 2026 and 2025, respectively. The fair value of outstanding foreign currency exchange contracts was a net liability of$0.1 million and net asset of less than $0.1 million at August 31, 2026 and 2025, respectively. Net foreign currency loss (gain) (included in “Other expense, net” in the Consolidated Statements of Earnings) related to these derivative instruments are as follows:

During December 2022, the Company entered into an interest rate swap, with a maturity date of November 30, 2025, for the notional amount of $60.0 million at a fixed interest rate of 4.022% to hedge the floating interest rate of the Company's term loan. Upon maturation of this swap, during November 2025, the Company entered into a new interest rate swap, with a maturity date of September 9, 2027, for the notional amount on $90.0 million at a fixed rate of 3.4565%. The interest rate swap was designated and qualified as a cash flow hedge. The Company uses the interest rate swap for the management of interest rate risk exposure, as an interest rate swap effectively converts a portion of the Company's debt from a floating rate to a fixed rate.

The Company records the fair value of the interest rate swap as an asset or liability on its balance sheet. The change in the fair value of the interest rate swap, a net gain of $0.4 million and netloss of less than $0.1 million for the years ended August 31, 2026 and 2025, respectively, is recorded in other comprehensive income (loss).

The Company also uses interest-rate derivatives to hedge portions of our net investments in non-U.S. subsidiaries (net investment hedge) against the effect of exchange rate fluctuations on the translation of foreign currency balances to the U.S. dollar. For derivatives that are designated and qualify as a net investment hedge in a foreign operation, the net gains or losses attributable to the hedge changes are recorded in other comprehensive income (loss) where they offset gains and losses recorded on our net investments where the entity has non-U.S. dollar functional currency. During December 2022, the Company entered into a cross-currency swap designated as a net investment hedge with a notional amount of $30.5 million. In November 2025, this cross-currency swap was amended to extend the maturity date to November 30, 2028. On October 28, 2024, the Company entered into a cross-currency swap designated as a net investment hedge with a notional amount of $14.1 million and a maturity date of September 9, 2027. The change in the fair value of the net investment hedges, a net loss of $3.5 million and $3.6 million for the years ended August 31, 2026 and 2025, respectively, is recorded in other comprehensive income (loss).

Note 11. Leases

As of August 31, 2026, the Company had operating leases for real estate, vehicles, manufacturing equipment, IT equipment and office equipment. The Company did not have significant finance leases during the year ended August 31, 2026. Our leases typically range in term from 3 to 15 years and may contain renewal options for periods up to 5 years at our discretion. Our leases generally contain payments that are primarily fixed; however, certain lease arrangements contain variable payments, which are expensed as incurred and not included in the measurement of ROU assets and lease liabilities. These amounts include payments affected by changes in the Consumer Price Index and executory costs (such as real estate taxes, utilities and common-area maintenance), which are based on usage or performance. In addition, our leases generally do not include material residual value guarantees or material restrictive covenants.

The components of lease costs for the year ended August 31, 2026, 2025 and 2024 were as follows:

Supplemental cash flow and other information related to leases for the year ended August 31, 2026, 2025 and 2024 were as follows:

Supplemental balance sheet information related to leases at August 31, 2026 and 2025 were as follows:

A summary of the future minimum lease payments due under operating leases with terms of more than one year at August 31, 2026 is as follows (in millions):

Note 12. Employee Benefit Plans

U.S. Defined Benefit Pension Plans

All of the U.S. defined benefit pension plans are frozen, and as a result, plan participants no longer earn additional benefits. The following table provides detail of changes in the projected benefit obligations, the fair value of plan assets and the funded status of the Company’s U.S. defined benefit pension plans as of the respective August 31 measurement date:

The following table provides detail on the Company’s domestic net periodic benefit expense:

As of August 31, 2026 and 2025, $13.0 million and $14.7 million, respectively, of pension plan actuarial losses, which have not yet been recognized in net periodic benefit cost, were included in accumulated other comprehensive loss, net of income taxes. During fiscal 2027, $1.1 million of these actuarial losses are expected to be recognized in net periodic benefit cost.

Weighted-average assumptions used to determine U.S. pension plan obligations as of August 31 and weighted-average assumptions used to determine net periodic benefit cost for the years ended August 31 are as follows:

The Company's objective for its pension plan is to achieve an asset and liability duration match so that interim fluctuations in funded status should be limited by increasing the correlation between assets and liabilities. As such, the plan assets are invested to maintain funded ratios over the long term, while managing the risk that funded ratios fall meaningfully below 100%. In fiscal 2026, the plan assets were invested in a mix of 70% duration-matched fixed income securities and 30% equity securities. In fiscal 2025, the plan assets were invested in a mix of 50% duration-matched fixed income securities and 50% equity securities. Cash balances are maintained at levels adequate to meet near-term plan expenses and benefit payments. Investment risk is measured and monitored on an ongoing basis. At August 31, 2026, the Company’s overall expected long-term rate of return for assets in U.S. pension plans was 6.45%. The expected long-term rate of return is based on the portfolio as a whole and not on the sum of the returns on individual asset categories. The target return is based on historical returns adjusted to reflect the current view of the long-term investment market and our investment mix between 70% fixed income and 30% equity securities.

The U.S. pension plan investment allocations by asset category were as follows:

The fair value of mutual funds is based on unadjusted quoted market prices and therefore are classified as Level 1 within the fair value hierarchy under US GAAP. U.S. Treasury Securities and Corporate Bonds are valued using Level 2 inputs, as defined in Note 9, “Fair Value Measurements.”

Projected benefit payments from plan assets to participants in the Company’s U.S. pension plans are $3.0 million for both fiscal 2027 and 2028, $2.9 million for fiscal 2029, $2.7 million for fiscal 2030, $2.6 million for fiscal 2031 and $11.3 million in aggregate for the following five years. The Company plans to make a contribution of $0.4 million to the U.S. pension plans in fiscal 2027.

The Company has seven foreign defined benefit pension plans which cover certain existing and former employees of businesses outside the U.S. Most of the participants in the foreign defined benefit pension plans are inactive and no longer earning additional benefits. The following table provides details of changes in the projected benefit obligations, the fair value of plan assets and the funded status of the Company’s significant foreign defined benefit pension plans as of the respective August 31 measurement date:

The following table provides detail on the Company’s foreign net periodic benefit expenses:

The weighted average discount rate utilized for determining the benefit obligation at August 31, 2026 and 2025 was 5.3% and 4.7%, respectively. The plan assets of these foreign pension plans consist primarily of participating units in fixed income and equity securities and insurance contracts. The Company’s overall expected long-term rate of return on these investments is 4.3%. During fiscal 2027, the Company does not anticipate contributing to these pension plans.

Projected benefit payments to participants in these foreign plans are $0.3 million for fiscal 2027 and $0.4 million for each of fiscal 2028, fiscal 2029, fiscal 2030 and fiscal 2031 and $2.8 million in aggregate for the five years thereafter. The Company does not plan to make a contribution of to the foreign pension plans in fiscal 2027.

Other Postretirement Health Benefit Plans

The Company provides other postretirement health benefits (“OPEB”) to certain existing and former employees of domestic businesses it acquired, who were entitled to such benefits prior to acquisition. These unfunded plans had a benefit obligation of $1.4 million and $1.5 million at August 31, 2026 and 2025, respectively. These obligations are determined utilizing assumptions consistent with those used for our U.S. pension plans and a health care cost trend rate of 7.0%, trending downward to 5.0% by fiscal 2027, and remaining level thereafter. Net periodic benefit costs for other postretirement benefits was income of less than $0.1 million for each of the years ended August 31, 2026, 2025 and 2024. Benefit payments from the plan are funded through participant contributions and Company contributions. Benefit payments are projected to be $0.2 million in fiscal 2027.

Defined Contribution Benefit Plans

The Company maintains a 401(k) plan for substantially all full time U.S. employees (the “401(k) Plan”). Under plan provisions, the Company funds cash for its contributions. Amounts are allocated to accounts set aside for each employee’s retirement. Employees generally may contribute up to 50% of their compensation to individual accounts within the 401(k) Plan.

While contributions vary, the Company's match contribution is $0.50 for every $1 contributed by employees, up to 8% of the employees' eligible pay. These match contributions are made on every payroll run, meaning the contribution is immediately 100% vested. In addition, the Company may make an annual, discretionary contribution of up to 3% of employees' eligible pay to employees employed as of the end of the plan year. The discretionary contribution has athree-year vesting period. The Company elected not to provide a discretionary contribution for the year ended August 31, 2026. Expense recognized related to the 401(k) plan totaled $2.1 million for fiscal 2026,$2.0 million for fiscal 2025, and $2.1 million for fiscal 2024.

In addition to the 401(k) plan, the Company sponsors a non-qualified supplemental executive retirement plan (“the SERP Plan”). The SERP Plan is an unfunded defined contribution plan that covers certain current and former executive employees and has an annual contribution formula based on age and years of service (with Company contributions ranging from 3% to 6% of eligible wages). This unfunded plan had a $0.6 million and $0.7 million obli gation at August 31, 2026 and 2025, respectively. Expense recognized for the SERP Plan was $0.2 million in both fiscal 2026 and 2025, and $0.3 million in fiscal 2024.

Deferred Compensation Plan

The Company maintains a deferred compensation plan to allow eligible U.S. employees to defer receipt of current cash compensation and restricted stock units vesting in order to provide future savings benefits. Eligibility is limited to employees who earn compensation that exceeds certain pre-defined levels. Participants have the option to invest their deferrals in a fixed income investment, a defined set of mutual funds, and/or, with respect to deferrals of restricted stock units, in Company common stock. The fixed income and mutual fund portion of the plan is unfunded, and therefore all compensation deferred under the plan is held by the Company and commingled with its general assets. Liabilities of $4.5 million and $6.6 million are included in the Consolidated Balance Sheets at August 31, 2026 and 2025, respectively, to reflect the unfunded portion of the deferred compensation liability. The Company recorded expense in “Financing costs, net” of $0.5 million, $0.6 million and $0.9 million for fiscal 2026, fiscal 2025 and fiscal 2024, respectively, for the non-funded return on participant deferrals. Company common stock contributions to fund the plan are held in a rabbi trust, accounted for in a manner similar to treasury stock and are recorded at cost in “Stock held in trust” within shareholders’ equity on the Consolidated Balance Sheets with the corresponding deferred compensation liability also recorded within shareholders’ equity on the Consolidated Balance Sheets. Because no investment diversification is permitted within the trust, changes in fair value of the Company's common stock are not recognized.

Note 13. Income Taxes

Earnings before income taxes from continuing operations, are summarized as follows:

Income tax expense from continuing operations is summarized as follows:

Income tax expense from continuing operations recognized in the accompanying consolidated statements of earnings differs from the amounts computed by applying the federal income tax rate to earnings from continuing operations before income tax expense. A reconciliation of income taxes at the federal statutory rate to the effective tax rate is summarized in the following table in accordance with the guidance in ASU 2023-09:

(1) State income taxes in Wisconsin and California comprised greater than 50% of the tax effect in this category.

A reconciliation of income taxes at the federal statutory rate to the effective tax rate prior to the adoption of ASU 2023-09 is summarized in the table below:

(1)The Company generated $3.0 million and $3.4 million of withholding tax and U.S. tax on non-U.S. earnings, net of foreign tax credits for fiscal 2025 and 2024, respectively.

(2)The Company generated a tax expense related to audits and adjustments of $0.4 million for both fiscal 2025 and fiscal 2024.

The amounts of cash income taxes paid by the Company were as follows:

The amount of cash income taxes paid by the Company during the years ended August 31, 2025 and 2024 was $26.6 million and $23.8 million, respectively.

Temporary differences and carryforwards that gave rise to deferred tax assets and liabilities include the following items:

(1) The net deferred income tax asset is reflected on the balance sheet in two categories: an asset of $12.1 million and $13.7 million for fiscal 2026 and 2025, respectively, is included in “Other long-term assets” and a liability of $10.9 million and $6.2 million for fiscal 2026 and 2025, respectively, is included in “Deferred income taxes”.

The Company has $46.9 million and $2.4 million of gross state net operating loss and credit carryforwards, respectively, which are available to reduce future state tax liabilities. These state net operating loss carryforwards expire at various times through 2076. The Company also has $69.0 million and $8.2 million of foreign loss and credit carryforwards, respectively, which are available to reduce certain future foreign tax liabilities. The majority of the foreign loss carryforwards are not subject to any expiration dates, while the other balances expire at various times through 2036. The valuation allowance represents a reserve for deferred tax assets, including loss carryforwards and foreign tax credits, for which utilization is uncertain.

In general, the Company’s practice is to reinvest the earnings of its non-U.S. subsidiaries within those operations. Routinely, the Company analyzes the factors surrounding global cash needs and future cash utilization and determines if there are any exceptions. As of August 31, 2026, certain jurisdictions met this exception. On the undistributed foreign earnings that are no longer permanently reinvested outside of the United States, the Company recorded a deferred tax liability of $2.7 million.

Changes in the Company’s gross liability for unrecognized tax benefits, excluding interest and penalties, are as follows:

Substantially all of these unreco gnized tax benefits, if recognized, would impact the effective income tax rate. As of August 31, 2026, 2025 and 2024, the Company recognized $5.8 million, $5.7 million and $5.0 million, respectively, for interest and penalties related to unrecognized tax benefits. The Company recognizes interest and penalties related to underpayment of income taxes as a component of income tax expense. With few exceptions, the Company is no longer subject to U.S. federal, state and foreign income tax examinations by tax authorities in major tax jurisdictions for years prior to fiscal 2014.

Note 14. Capital Stock and Share Repurchases

The authorized common stock of the Company as of August 31, 2026 consisted of 168,000,000 shares of Class A common stock, $0.20 par value, of which 51,185,430 shares were issued and outstanding;1,500,000 shares of Class B common stock, $0.20 par value, none of which are outstanding; and 160,000 shares of cumulative preferred stock, $1.00 par value (“preferred stock”), none of which have been issued. Holders of both classes of the Company’s common stock are entitled to dividends, as the Company’s Board of Directors may declare out of funds legally available, subject to any contractual restrictions on the payment of dividends or other distributions on the common stock. If the Company were to issue any of its preferred stock, no dividends could be paid or set apart on shares of common stock, unless paid in common stock, until dividends on all of the issued and outstanding shares of preferred stock had been paid or set apart for payment and provision had been made for any mandatory sinking fund payments.

The Company's Board of Directors has authorized the repurchase and immediate retirement of shares of the Company's common stock under publicly announced share repurchase and retirement programs. Since the inception of the initial share repurchase program in fiscal 2012, the Company has repurchased 33,860,026 shares of common stock for $988.7 million. In October 2025, the Company's Board of Directors approved a new share repurchase program authorizing the repurchase of a total of $200 million of the Company's outstanding common stock. This new program took immediate effect, and replaced the prior share repurchase program that had been authorized in March 2022. The Company repurchased and retired 2,078,645 shares for $81.1 million (inclusive of excise taxes of $0.8 million)in the year ended August 31, 2026 under the October 2025 authorization and 1,699,200 shares for$68.7 million (inclusive of excise taxes of $0.7 million) in the year ended August 31, 2025 under the previous authorization. At August 31, 2026, the maximum value of shares that may yet be purchased under the program is $119.7 million.

Earnings Per Share

The reconciliation between basic and diluted earnings per share is as follows:

Note 15. Stock Plans

Share based awards may be granted to key employees and directors under the Enerpac Tool Group Corp. 2017 Omnibus Incentive Plan (as amended and restated November 9, 2020) (the “Plan”). A total of 7,825,000 shares of Class A common stock have been authorized for issuance under the Plan plus shares, if any, that become issuable, pursuant to the terms of the Plan, upon the expiration, cancellation or forfeiture of awards under our previously registered stock plans outstanding at the time the Plan was first approved by the Company's shareholders. At August 31, 2026,1,847,138 shares were available for future award grants. The Plan permits the Company to grant share-based awards, including stock options, restricted stock units and performance shares to employees and directors. Under the Plan, options may have a maximum term often years and an exercise price per share no less than 100% of the fair market value of the Company’s common stock at the date of grant. No Options have been granted under Plan. The Company’s restricted stock grants generally vest, subject to continued employment, in equal annual installments over athree-year period. The awards of performance shares generally include athree-year performance period and vest at the end of the period, subject to continued employment. The awards of performance shares granted in fiscal 2026, fiscal 2025 and fiscal 2024 generally provide forpayout based 33.34% on the relative total shareholder return metric,33.33% on the Company's adjusted earnings per share and 33.33% on the Company's three-year average return on invested capital. The provisions of share-based awards may vary by individual grant with respect to vesting period, dividend and voting rights, performance conditions and forfeitures.

A summary of restricted stock units and performance shares activity during fiscal 2026 is as follows:

A summary of stock option activity during fiscal 2026 is as follows:

Intrinsic value is the difference between the market value of the stock at August 31, 2026 and the exercise price which is aggregated for all outstanding and exercisable options. A summary of the total intrinsic value of options exercised and cash receipts from options exercised is summarized below:

The Company generally records compensation expense over the vesting period for restricted stock unit awards based on the market value of the Company's Class A common stock on the grant date and utilized an expected forfeiture rate of 12% for the years ended August 31, 2026, 2025 and 2024. The fair value of Performance Shares with market vesting conditions utilize a Monte Carlo simulation model while those with performance vesting conditions have a fair value based on market price on the date of grant with updates made periodically to the amount of expense recognized based on our assessment of the performance condition being met with a range of attainment between 0% and 200%.

As of August 31, 2026, there was $10.6 million of total unrecognized compensation cost related to share-based awards, including stock options, restricted stock units and Performance Shares, which will be recognized over a weighted average period of 1.3 years. The total fair value of share-based awards that vested during the fiscal years ended August 31, 2026, 2025 and 2024 was $10.6 million, $11.8 million and $8.3 million, respectively.

Note 16. Business Segment, Geographic and Customer Information

The Companyis a global manufacturer of a broad range of industrial products and solutions. The IT&S reportable 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 MRO; machining & manufacturing; power generation; infrastructure; mining and other markets. The Other segment is included for purposes of reconciliation of the respective balances below to the condensed consolidated financial statements.

The Company’s Chief Executive Officer is the Chief Operating Decision Maker (CODM). The CODM allocates resources and makes operating decisions based on the financial information presented by the Company’s segments. The measures regularly reviewed by our CODM include segment sales, segment operating profit and segment operating profit margin. Our CODM uses these financial measures to evaluate and allocate capital and company resources as critical determinants of segment performance. In addition, these metrics are used to monitor actual to forecasted and budgeted results to benchmark to our peers. The following table includes segment sales, significant expense items and segment operating profit as viewed by the CODM for the years ended August 31, 2026, 2025, and 2024.

In addition to the impact of changes in foreign currency exchange rates, the comparability of segment and product line information is impacted by acquisition/divestiture activities, impairment and divestiture charges, restructuring costs and related benefits. Corporate assets, which are not allocated, principally represent cash and cash equivalents, property, plant, and equipment, ROU assets, capitalized debt issuance costs and deferred income taxes.

The following tables summarize net sales and property, plant and equipment by geographic region (in millions):

The Company’s largest customer accounted for approximately 3% of sales in each of the last three fiscal years. Export sales from domestic operations were 4.4%,7.3% and 7.9% of total net sales from continuing operations in fiscal 2026, 2025 and 2024, respectively.

Note 17. Commitments and Contingencies

The Company had outstanding commercial letters of credit of$3.9 million and surety bonds of$2.6 million at August 31, 2026, and$5.9 million of letters of credit and $4.8 millionof surety bonds at August 31, 2025, the majority of which relate to commercial contracts and self-insured workers' compensation programs.

As part of the Company's global sourcing strategy, we have entered into agreements with certain suppliers that require the supplier to maintain minimum levels of inventory to support certain products for which we require a short lead time to fulfill customer orders. We have the ability to notify the supplier that they no longer need to maintain the minimum level of inventory should we discontinue manufacturing of a product during the contract period; however, we must purchase the remaining minimum inventory levels the supplier was required to maintain within a defined period of time.

The Company is a party to various legal proceedings that have arisen in the normal course of business. These legal proceedings include regulatory matters, product liability, breaches of contract, employment, personal injury and other disputes. The Company has recorded reserves for loss contingencies based on the specific circumstances of each case. Such reserves are recorded when it is probable a loss has been incurred and can be reasonably estimated. The Company maintains a policy to exclude from such reserves an estimate of legal defense costs. In the opinion of management, resolution of these contingencies is not expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.

Additionally, in fiscal 2019, the Company provided voluntary self-disclosures to both Dutch and U.S. authorities related to sales of products and services linked to the Crimea region of Ukraine, which sales potentially violated European Union and

U.S. sanctions provisions. Although the U.S. investigation closed without further implication, the Dutch investigation continued. The Dutch Investigator concluded his investigation in March 2022 and provided the results to the Public Prosecutor's office for review. Specifically, the Investigator concluded that the sales transactions violated EU sanctions. The conclusion in the Investigator's report was consistent with the Company's understanding of what could be stated in the report and supported the Company to record an expense in the fiscal year-ended August 31, 2021, representing the low end of a reasonable range of financial penalties the Company may incur as no other point within the range was deemed more probable. The matter remains subject to further legal proceedings in the Netherlands. The Company has not adjusted its estimate of financial penalties as a result of the status of legal proceedings in the year ended August 31, 2026. While there can be no assurance of the ultimate outcome of the matter, the Company currently believes that there will be no material adverse effect on the Company's financial position, results of operations or cash flows from this matter.

Note 18. Subsequent Events

Refinancing of Senior Credit Facility

On October 16, 2026, the Company refinanced its credit facility resulting in a new $850 million senior credit facility, comprised of a $550 million revolving line of credit and a$300 million term loan, which will mature in October 2031. The Company has the option to request up to$425 million of additional revolving commitments and/or term loans under the new facility, subject to customary conditions, including the commitment of the participating lenders. The new facility provides for interest rate margins above adjusted term SOFR ranging from 1.125% to 1.875% per annum depending on the Company’s net leverage ratio. Borrowings under the new facility initially bear interest at adjusted term SOFR plus 1.125% per annum. In addition, the new facility contains financial covenants requiring the Company to not permit (i) the net leverage ratio, determined as of the end of each of its fiscal quarters, to exceed 3.75 to 1.00 (or, at the Company’s election and subject to certain conditions,4.25 to 1.00 for the testing period during which certain material acquisitions occur and the next succeeding four testing periods) or (ii) the interest coverage ratio, determined as of the end of each of its fiscal quarters, to be less than 3.00 to 1.00. Borrowings under the new facility are secured by substantially all personal property assets of the Company and its domestic subsidiary guarantors (other than certain specified excluded assets) and certain of the equity interests of certain subsidiaries of the Company. Initial borrowings under the new credit facility were applied to repay all outstanding borrowings under the refinanced credit facility which had been scheduled to mature in September 2027.

On October 28, 2026, the Company acquired Specialized Fabrication Equipment Group LLC (“SFE Group”) in a merger transaction in which the aggregate amount paid by the Company with respect to the equity interests in SFE Group was approximately$452 million in cash, plus the issuance by the Company of approximately $20 million in restricted stock unit awards to key personnel of SFE Group, in lieu of cash payment of transaction bonuses owed by SFE Group to such personnel upon completion of the merger transaction. The cash portion of the acquisition consideration is subject to customary adjustments for the level of cash, net working capital, transaction related expenses (including with respect to the transaction bonuses), indebtedness and other similar items existing at SFE Group and its subsidiaries as of the closing date of the transaction. The Company funded the payment of the cash consideration at closing from cash on hand, its recently refinanced$300 million term loan and borrowings of$312 million under its revolving credit facility.

SFE Group is a global industrial equipment company focused on pipe and tube fabrication, welding, machining, and maintenance tools and serves industries such as aerospace & defense, food & beverage, bio-pharma, oil & gas, manufacturing, utilities, power generation, semiconductor, maritime, mining, transportation, data centers, and hospitals.

As the transaction had not closed as of August 31, 2026, the Company has not recorded the acquisition or performed an allocation of the purchase consideration to the net assets acquired at closing. The Company expects to finalize the purchase price allocation for the acquisition within the allowable measurement period.

Adoption of Inducement Award Plan

On October 28, 2026, 2026, the Company’s Board of Directors adopted the Enerpac Tool Group Inducement Award Plan (the “Inducement Plan”), which provides for the issuance of up to 621,622 shares of the Company’s Class A common stock pursuant to equity awards to be granted solely to individuals who are expected to become officers and other employees and to whom the Company may grant equity awards without shareholder approval pursuant to the New York Stock Exchange’s Listing Rule 303A.08, or any successor rule relating to inducement awards. The Inducement Plan was adopted to facilitate awards of restricted stock units and other long-term equity awards to personnel of SFE Group in connection with the acquisition.