Enerpac Tool Group Corp. (NYSE:EPAC) Q4 2023 Earnings Conference Call October 17, 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 Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. As a reminder, this conference is being recorded, today, October 17, 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 year-end fiscal 2023 earnings call. On the call today to present the company's results are Paul Sternlieb, President and CEO; 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. You can find a reconciliation of GAAP to non-GAAP measures in the appendix of the slides as well as in the press release issued yesterday.

Our comments will also include forward-looking statements that are subject to business risks that could cause actual results to be materially different. Those risks include matters noted in our latest SEC filings.

Now, I will turn the call over to Paul.

Paul Sternlieb

Thanks, Travis, and good morning. It’s a pleasure to be here to talk about Enerpac’s strong financial performance in fiscal '23. We also have a lot of good news to report in terms of the success of our ASCEND transformation program with our first full year of implementation now behind us.

As you can see on Slide 3, full year revenue of $598 million exceeded our initial guidance and came in at the high end of the guidance we revised upward last quarter. Reported revenues expanded 5%, while core sales, which exclude the impact of foreign exchange and dispositions, were up 8% over the prior year. Free cash flow also exceeded initial guidance and was toward the upper end of our revised guidance, and adjusted EBITDA of $136 million well exceeded our expectations and expanded 65% year-over-year.

In fiscal 2023, we moved into the implementation stage of our ASCEND transformation program designed to accelerate Enerpac's growth and profitability. To date, I'm pleased to report that we are ahead of schedule in terms of the timing and benefits of ASCEND. Originally, we anticipated total annualized adjusted EBITDA benefits of $40 million to $50 million by the end of fiscal 2024. In the second quarter, we raised that guidance to $50 million to $60 million. In fact, in fiscal 2023, we achieved our goal, capturing ASCEND benefits of $54 million and a year ahead of plan. While ASCEND remains an important part of transforming the company, given that we are well ahead of schedule, we intend to leverage the power of ASCEND to transition to a focus on continuous improvement.