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Enerpac (EPAC) Up 2.5% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Enerpac (EPAC - Free Report) . Shares have added about 2.5% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Enerpac due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Enerpac Tool Lags Q4 Earnings and Sales Estimates
Enerpac Tool has reported weaker-than-expected results for fourth-quarter fiscal 2021 (ended Aug 31, 2021). Its earnings and sales surprises were -20.83% and -3.02%, respectively.
The company’s adjusted earnings per share in the reported quarter were 19 cents, lagging the Zacks Consensus Estimate of 24 cents. However, the bottom line improved from earnings of 2 cents per share in the year-ago quarter on the back of solid revenue generation, improvement in margins and low taxes.
For fiscal 2021, the company’s adjusted earnings were 63 cents per share, lagging the Zacks Consensus Estimate of 67 cents. From the year-ago reported figure, the bottom line increased 250%.
Revenue Details
In the reported quarter, the company’s revenues were $145.4 million, reflecting 30.5% growth from the year-ago quarter’s figure. The top line gained from strengthening segmental businesses.
The top line lagged the Zacks Consensus Estimate of $150 million. Also, revenues were below the company’s projection of $147-$152 million due mainly to woes related to logistics, supply chain and pandemic-led lockdowns.
Organic sales in the quarter under review were up 28% year over year, driven by 55% growth in service revenues and a 23% increase in product sales. Movements in foreign currency had a positive impact of 3% on the results.
The segmental information is briefly discussed below.
Industrial Tools & Services: Revenues in the reported quarter totaled $134.8 million, reflecting a 30.8% increase from the year-ago figure. The segment’s core sales increased 28%, while foreign currency translation had a positive impact of 3%. This year-over-year growth in revenues was driven by market recovery worldwide.
Other: Revenues in the segment totaled $10.6 million, up 27.8% from the year-ago quarter.
For fiscal 2021, the company’s revenues were $528.7 million, reflecting an increase of 7.2% from the previous year. The top line lagged the Zacks Consensus Estimate of $533.2 million by 0.84%.
Margin Profile
In the reported quarter, Enerpac Tool’s cost of sales increased 18.3% year over year to $79.2 million. It represented 54.4% of the reported quarter’s net sales compared with 60.1% in the year-ago quarter. The gross profit grew 49% year over year to $66.3 million. The gross margin grew 560 basis points year over year to 45.6%. Selling, administrative and engineering expenses increased 20% year over year to $45.2 million.
EBITDA were $24.2 million, up 131.7% year over year. The adjusted EBITDA margin was 16.6% compared with 9.4% in the year-ago quarter.
Adjusted operating income was $19.3 million in the reported quarter, reflecting an improvement from $4.6 million generated in the year-ago quarter. The adjusted operating margin in the quarter under review was 13.2% compared with 4.2% in the year-ago quarter. Net financing costs declined 73.7% year over year to $0.9 million.
Effective income tax in the quarter was 36%, lower than the year-ago quarter’s 51%.
Balance Sheet and Cash Flow
Exiting fourth-quarter fiscal 2021, Enerpac Tool’s cash and cash equivalents totaled $140.4 million, up 3% from $136.3 million at the end of the last reported quarter. Long-term debt was down 10.3% sequentially at $175 million.
In the reported quarter, the company repaid $20 million of term loans. Its net debt to adjusted EBITDA was 0.6X at the end of the fiscal fourth quarter versus 1.1X at the third-quarter end.
Enerpac Tool generated net cash of $29.3 million from its operating activities in the fourth quarter of fiscal 2021, increasing 133.5% year over year. Capital spending totaled $2.5 million, down 8.4% year over year. Free cash flow in the reported quarter was $27 million, increasing 172.9% year over year.
In fiscal 2021, the company refrained from repurchasing its shares, while paid out cash dividends of $2.4 million.
Outlook
Enerpac Tool anticipates benefiting from market recoveries globally. It believes that product development, organic prospects and gains from buyouts will be beneficial in the quarters ahead. Supply-chain restrictions, shutdowns related to COVID-19, high commodity costs, and logistics problems are headwinds for the company.
For fiscal 2022 (ending August 2022), Enerpac Tool anticipates sales of $590-$610 million, higher than the year-ago figure of $528.7 million. Incremental adjusted EBITDA is expected to be 35-45% in the year.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
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Enerpac (EPAC) Up 2.5% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Enerpac (EPAC - Free Report) . Shares have added about 2.5% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Enerpac due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Enerpac Tool Lags Q4 Earnings and Sales Estimates
Enerpac Tool has reported weaker-than-expected results for fourth-quarter fiscal 2021 (ended Aug 31, 2021). Its earnings and sales surprises were -20.83% and -3.02%, respectively.
The company’s adjusted earnings per share in the reported quarter were 19 cents, lagging the Zacks Consensus Estimate of 24 cents. However, the bottom line improved from earnings of 2 cents per share in the year-ago quarter on the back of solid revenue generation, improvement in margins and low taxes.
For fiscal 2021, the company’s adjusted earnings were 63 cents per share, lagging the Zacks Consensus Estimate of 67 cents. From the year-ago reported figure, the bottom line increased 250%.
Revenue Details
In the reported quarter, the company’s revenues were $145.4 million, reflecting 30.5% growth from the year-ago quarter’s figure. The top line gained from strengthening segmental businesses.
The top line lagged the Zacks Consensus Estimate of $150 million. Also, revenues were below the company’s projection of $147-$152 million due mainly to woes related to logistics, supply chain and pandemic-led lockdowns.
Organic sales in the quarter under review were up 28% year over year, driven by 55% growth in service revenues and a 23% increase in product sales. Movements in foreign currency had a positive impact of 3% on the results.
The segmental information is briefly discussed below.
Industrial Tools & Services: Revenues in the reported quarter totaled $134.8 million, reflecting a 30.8% increase from the year-ago figure. The segment’s core sales increased 28%, while foreign currency translation had a positive impact of 3%. This year-over-year growth in revenues was driven by market recovery worldwide.
Other: Revenues in the segment totaled $10.6 million, up 27.8% from the year-ago quarter.
For fiscal 2021, the company’s revenues were $528.7 million, reflecting an increase of 7.2% from the previous year. The top line lagged the Zacks Consensus Estimate of $533.2 million by 0.84%.
Margin Profile
In the reported quarter, Enerpac Tool’s cost of sales increased 18.3% year over year to $79.2 million. It represented 54.4% of the reported quarter’s net sales compared with 60.1% in the year-ago quarter. The gross profit grew 49% year over year to $66.3 million. The gross margin grew 560 basis points year over year to 45.6%. Selling, administrative and engineering expenses increased 20% year over year to $45.2 million.
EBITDA were $24.2 million, up 131.7% year over year. The adjusted EBITDA margin was 16.6% compared with 9.4% in the year-ago quarter.
Adjusted operating income was $19.3 million in the reported quarter, reflecting an improvement from $4.6 million generated in the year-ago quarter. The adjusted operating margin in the quarter under review was 13.2% compared with 4.2% in the year-ago quarter. Net financing costs declined 73.7% year over year to $0.9 million.
Effective income tax in the quarter was 36%, lower than the year-ago quarter’s 51%.
Balance Sheet and Cash Flow
Exiting fourth-quarter fiscal 2021, Enerpac Tool’s cash and cash equivalents totaled $140.4 million, up 3% from $136.3 million at the end of the last reported quarter. Long-term debt was down 10.3% sequentially at $175 million.
In the reported quarter, the company repaid $20 million of term loans. Its net debt to adjusted EBITDA was 0.6X at the end of the fiscal fourth quarter versus 1.1X at the third-quarter end.
Enerpac Tool generated net cash of $29.3 million from its operating activities in the fourth quarter of fiscal 2021, increasing 133.5% year over year. Capital spending totaled $2.5 million, down 8.4% year over year. Free cash flow in the reported quarter was $27 million, increasing 172.9% year over year.
In fiscal 2021, the company refrained from repurchasing its shares, while paid out cash dividends of $2.4 million.
Outlook
Enerpac Tool anticipates benefiting from market recoveries globally. It believes that product development, organic prospects and gains from buyouts will be beneficial in the quarters ahead. Supply-chain restrictions, shutdowns related to COVID-19, high commodity costs, and logistics problems are headwinds for the company.
For fiscal 2022 (ending August 2022), Enerpac Tool anticipates sales of $590-$610 million, higher than the year-ago figure of $528.7 million. Incremental adjusted EBITDA is expected to be 35-45% in the year.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.