Enerpac Tool Group Corp. (EPAC) reported its first‑quarter fiscal 2026 results on December 17, 2025, showing net sales of $144.2 million—a 1% decline from the $145.2 million recorded a year earlier. The company’s product sales grew 4% organically, while service revenue fell 26% year‑over‑year, largely due to softness in the UK market.
Earnings per share came in at $0.36, missing the consensus estimate of $0.377 by $0.017. Adjusted EBITDA was $32.4 million, down from $34.3 million a year earlier, and the adjusted EBITDA margin contracted to 22.4% from 23.6%. The decline in margin reflects lower gross margins and a slight increase in operating expenses relative to sales.
Operating cash flow improved sharply, with net cash provided by operating activities rising to $16.0 million from $8.6 million a year earlier. Net debt remained low at $49.4 million, giving a leverage ratio of 0.3x. The company repurchased approximately 377,000 shares for $14.9 million under its share‑repurchase program authorized in October 2025.
Enerpac reiterated its fiscal 2026 guidance, maintaining a net sales outlook of $635 million to $655 million and an adjusted EBITDA forecast of $158 million to $168 million. Management expressed confidence that the company’s product strength and order growth will offset the current headwinds.
President and CEO Paul Sternlieb said the quarter’s results were “essentially as expected” and highlighted “solid sales growth, particularly in the Americas, and even stronger order growth” as reasons for cautious optimism. He noted that product sales in the Industrial Tools & Services segment grew 4% organically, driven by market‑share gains.
Analysts had projected revenue of $148.8 million and EPS of $0.377 for the quarter. The miss on both metrics signals that demand softness, especially in the UK service market, has weighed on the company’s performance. Investors reacted negatively, citing the revenue and EPS misses and margin compression as key concerns.
The company’s service revenue decline is attributed to project delays and reduced demand for services in the UK, while product sales growth in the Americas and the IT&S segment offset some of the weakness. The company’s strong operating cash flow and low net debt position provide a cushion for navigating the short‑term headwinds.
Despite the misses, Enerpac’s guidance remains unchanged, reflecting management’s belief that the company can achieve its full‑year targets through continued focus on product strength, cost discipline, and order growth. The company’s low leverage and healthy cash position position it well to weather the current macro‑economic softness while pursuing growth in its stronger segments.
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