Enerpac Tool Group Corp. (NYSE:EPAC) Q3 2023 Earnings Conference Call June 22, 2023 8:30 AM ET

Company Participants

Travis Williams - Director of Investor Relations

Paul Sternlieb - President and Chief Executive Officer

Anthony Colucci - Executive Vice President and Chief Financial Officer

Operator

Ladies and gentlemen, thank you for standing by. Welcome to Enerpac Tool Group's Third Quarter Earnings Conference Call. As a reminder, this conference is being recorded, June 22, 2023.

It's now my pleasure to turn the conference over to Travis Williams, Director of Investor Relations. Please go ahead, Mr. Williams.

Travis Williams

Thank you, operator. Good morning and thank you for joining us for Enerpac Tool Group's third quarter fiscal 2023 earnings conference call. On the call today to present the company's results are Paul Sternlieb, President and Chief Executive Officer; Anthony Colucci, Chief Financial Officer.

Our slides and recording of today's call will be available on Enerpac's website in the Investors section. In today's call, we'll reference non-GAAP measures and you can find a reconciliation of GAAP to non-GAAP measures in the press release issued yesterday.

Today's comments will include forward-looking statements that are subject to business risk, that could cause actual results to be materially different. Those risks include, among others, matters noted in our latest SEC filings.

Now I will turn the call over to Paul.

Paul Sternlieb

Thanks, Travis, and good morning, everyone. First, I'd like to formally welcome Travis to the Enerpac team as our new Head of Investor Relations.

Thank you for joining our earnings call this morning. I'm happy to cover our Q3 results and the progress we are making on the implementation of our growth strategy and ASCEND. Starting on slide three, steady demand for our products drove core sales growth of 4% in the quarter.

We were pleased to see growth in three of our four regions year-over-year led by double-digit growth in Europe and Asia-Pacific. Continued implementation of 80/20 and a more selective quoting process in our MENAC region negatively impacted service revenues in the quarter, which we estimate at a 200 basis point impact. We believe we're about halfway through this process in the MENAC region.

For the second consecutive quarter, we saw record gross profit and adjusted EBITDA margins since the launch of Enerpac Tool Group in 2019. And we continue to track towards our long-term targeted margins of greater than 25% as we laid out during last year's Investor Day.