Enerpac Tool Group reported higher sales for fiscal 2026, with stronger organic growth in the fourth quarter, but lower net earnings and margins. The Milwaukee-based industrial tools and services company also generated more free cash flow than a year earlier and said its acquisition of SFE Group is complete.
The company introduced a fiscal 2027 outlook, but the guidance figures are not included in the available announcement details.
Key details
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Sales grew, led by the fourth quarter. Revenue rose 11% to $185.7 million in the August quarter and 6% to $652.3 million for the full fiscal year. Organic sales increased 10% in the quarter and 4% for the year.
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Organic growth varied by business. In the fourth quarter, Industrial Tools & Services (IT&S) sales rose 10% organically, while Cortland Biomedical grew 13%. For the full year, IT&S grew 3% and Cortland Biomedical 23%.
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Profitability weakened despite higher revenue. Fourth-quarter net earnings fell to $24.4 million from $28.1 million a year earlier. Full-year net earnings declined to $89.7 million from $92.7 million. Enerpac attributed the quarterly decline mainly to product mix, higher incentive compensation and growth investments; for the year, it cited lower service volume, incentive compensation and investments in growth and productivity.
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Margins also narrowed. Gross margin was 47.0% in the quarter, down from 50.1%, and 49.2% for the year, compared with 50.5% in fiscal 2025. Adjusted EBITDA was $42.1 million in the quarter versus $44.5 million, while full-year adjusted EBITDA was nearly flat at $154.3 million, compared with $153.6 million. Its adjusted EBITDA margin declined to 22.6% for the quarter and 23.7% for the year.
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Per-share results were mixed. Fourth-quarter diluted earnings per share fell to $0.47 from $0.52, while adjusted diluted EPS was $0.53, compared with $0.52. For the year, diluted EPS rose to $1.72 from $1.70, and adjusted diluted EPS increased to $1.87 from $1.81. Restructuring and acquisition-related charges amounted to $0.15 per diluted share in fiscal 2026, versus $0.11 the prior year.
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Cash generation improved. Operating cash flow reached $130.2 million, up from $111.3 million. Capital expenditures were $10.6 million, compared with $19.3 million, resulting in free cash flow of $119.6 million versus $92.0 million. Cash on hand was $174.7 million at Aug. 31, up from $115.7 million at May 31.
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SFE Group acquisition is complete. Chief Executive Paul Sternlieb said Enerpac has financial flexibility to continue its capital allocation strategy following the acquisition. The announcement details provided do not specify the transaction’s financial terms.
Plain-English implications
Enerpac’s sales growth did not translate into higher net earnings: lower margins and increased compensation and investment costs weighed on profit. For the full year, adjusted EPS edged higher even as net earnings declined, while stronger cash generation increased the company’s year-end cash balance.