Enerpac Tool Group (EPAC) Q1 2026 earnings summary

Executive summary

• Q1 fiscal 2026 net sales were $144 million, down 1% year-over-year, with organic sales declining 2%–3% and product sales up 4%–7%, while service revenue fell 25%–26% due to UK and EMEA market weakness.

• Adjusted EBITDA was $32.4 million (22.4% margin), and net earnings were $19–$19.1 million, or $0.36 per diluted share, down from $0.40 last year.

• Strong order rates and growth in the Americas and IT&S products, with Cortland Biomedical segment up 27%.

• Investments continue in innovation, commercial capabilities, and e-commerce, with expansion in India, Australia, and the Philippines.

• $15 million returned to shareholders via share repurchases; leadership change in investor relations.

Financial highlights

• Gross margin was 50.7%, consistent with recent quarters but down 70 bps year-over-year due to service pressure and tariffs.

• Adjusted EBITDA margin was 22.4%; operating margin and adjusted operating margin were both 19.8%.

• Free cash flow was $13–$16 million, up year-over-year, with lower CapEx and improved operating cash flow.

• Cash balance at quarter-end was $139 million; net debt was $49–$49.4 million, with a net debt to adjusted EBITDA ratio of 0.3x.

• Total liquidity stood at $539 million, including $400 million undrawn revolver.

Outlook and guidance

• Fiscal 2026 guidance maintained: net sales of $635–$655 million, organic growth of 1%–4%, adjusted EBITDA of $158–$168 million, adjusted EPS of $1.85–$2.00, and free cash flow of $100–$110 million.

• Margin pressure from tariffs expected to ease in the second half; APAC region anticipated to return to growth.

• Guidance assumes stable FX rates and no major regulatory or tariff changes.