Business Wire | Sep 29, 2021 08:00AM EDT

Enerpac Tool Group Reports Fourth Quarter Fiscal 2021 Results and Provides Guidance for Fiscal 2022

Sep. 29, 2021

MILWAUKEE--(BUSINESS WIRE)--Sep. 29, 2021--Enerpac Tool Group Corp. (NYSE: EPAC) (the "Company") today announced results for its fiscal fourth quarter ended August 31, 2021.

"As we closed out this fiscal year, we continued our recovery from the global pandemic, with fourth quarter product sales nearing pre-COVID levels and IT&S product order rates for the quarter comparable to the fourth quarter of 2019. We are pleased to achieve EBITDA margin improvement over fiscal 2019 levels as a result of the structural cost actions we have taken. While we continued to face certain supply chain and other COVID-19-related challenges in the fourth quarter, we are encouraged by the continued strength in many of the vertical markets that we serve and the ongoing positive sentiment of our distributors," said Randy Baker, Enerpac Tool Group's President & CEO. "Moving into fiscal 2022, we remain focused on the safety of our employees, supporting our customers, and profitably growing Enerpac Tool Group through organic opportunities, new product development and acquisitions to enhance shareholder value."

Mr. Baker added, "I want to thank our employees for their hard work and dedication through the extraordinary circumstances we faced throughout the year. Between the on-going challenges associated with the COVID-19 pandemic and the more recent supply chain and logistics challenges resulting from the global economic recovery, our team continues to rise to the challenge to support our customers. We are confident that our business is well positioned for growth as the markets we serve continue to recover from COVID-19 related shutdowns."

Consolidated Results from Continuing Operations

(US$ in millions, exceptper share)

Three Months Ended Twelve Months Ended

August 31, August 31, August 31, August 31, 2021 2020 2021 2020

Net Sales $145.4 $111.4 $528.7 $493.3

Net Income $6.5 $0.2 $40.2 $5.6

Earnings Per Share $0.11 $0.00 $0.67 $0.09

Adjusted Diluted Earnings $0.19 $0.02 $0.63 $0.18Per Share

* Consolidated net sales from continuing operations for the fourth quarter were $145.4 million compared to $111.4 million in the prior year fourth quarter. Core sales improved 28% year over year, with product sales up 23% and service up 55%. The impact of foreign currency increased net sales by 3%. * Fiscal 2021 fourth quarter GAAP net income from continuing operations and diluted earnings per share from continuing operations were $6.5 million and $0.11, respectively, compared to net income from continuing operations and diluted EPS of $0.2 million and $0.00, respectively, in the fourth quarter of fiscal 2020. Fiscal 2021 fourth quarter net income from continuing operations included an impairment & divestiture charge of $5.7 million ($5.1 million, or $0.08 per share, after tax) attributable to the Other segment. * Fiscal 2020 fourth quarter net income from continuing operations included an impairment & divestiture charge of $0.4 million ($0.2 million, or $0.00 per share, after tax); restructuring charges of $1.0 million ($0.8 million, or $0.01 per share, after tax), primarily related to the restructuring plan announced in March 2020 to reduce redundant segment and corporate costs; a pension curtailment benefit of $0.8 million ($0.6 million, or $0.01 per share, after tax); and accelerated debt issuance costs of $1.0 million ($0.8 million, or $0.01 per share, after tax) related to the early redemption of the Company's 5.625% Senior Notes due 2022 in June 2020. * Excluding the items detailed above, adjusted diluted EPS from continuing operations was $0.19 for the fourth quarter of fiscal 2021 compared to $0.02 in the comparable prior year period. * Consolidated net sales for the twelve months ended August 31, 2021 were $528.7 million, compared to $493.3 million for the comparable prior year period. Core sales were up 5% year over year. The impact of foreign currency benefited year-over-year net sales by 2%. * Consolidated net income from continuing operations and diluted EPS from continuing operations for the twelve months ended August 31, 2021 were $40.2 million and $0.67, respectively, compared to net income from continuing operations and diluted EPS from continuing operations of $5.6 million and $0.09, respectively, in the comparable prior year period.

Industrial Tools & Services (IT&S)

(US$ in millions)

Three Months Ended Twelve Months Ended

August 31, August 31, August 31, August 31, 2021 2020 2021 2020

Sales $134.8 $103.0 $493.1 $454.9

Operating Profit $26.9 $11.3 $81.7 $65.5

Adjusted Op Profit ^ $26.8 $12.2 $84.3 $67.3(1)

Adjusted Op Profit % 19.9% 11.8% 17.1% 14.8%^(1)

(1) Excludes $0.1 million of restructuring benefit in the fourth quarter of fiscal 2021 compared to $0.5 million of restructuring charges and $0.4 million of impairment & divestiture charges in the fourth quarter of fiscal 2020. The twelve months ended August 31, 2021 excludes $2.1 million of restructuring charges and $0.5 million of net impairment & divestiture charges compared to $4.5 million of restructuring charges, $3.2 million of net impairment & divestiture gains and $0.4 million of purchase accounting charges in the twelve months ended August 31, 2020.

* Fourth quarter fiscal 2021 net sales were $134.8 million, 31% higher than the prior fiscal year's fourth quarter net sales. Core sales increased 28% year over year, with the impact of foreign currency increasing net sales by 3%. * The increase in revenue is attributable to the broad-based market recovery, as our largest regions of the world returned to more normalized levels of activity. * Adjusted operating profit margin of 19.9% in the quarter increased year over year primarily due to increased sales volume and savings from cost management and restructuring initiatives implemented in prior periods, despite increased material and freight costs.

Corporate Expenses and Income Taxes (excluding non-GAAP adjustments)

* Corporate expenses from continuing operations of $6.5 million for the fourth quarter of fiscal 2021 were $0.4 million higher than the comparable prior year period, primarily resulting from higher equity compensation, insurance and consulting costs. * The fiscal 2021 fourth quarter effective income tax rate from continuing operations of approximately 36% was lower than the fourth quarter fiscal 2020 rate of approximately 51%.

Discontinued Operations

Discontinued operations represent operating results for the divested EC&S segment through the October 31, 2019 completion date of the divestiture, as well as impacts from certain retained liabilities subsequent to the completion date.

^(1) Excludes $0.1 million of restructuring benefit in the fourth quarter offiscal 2021 compared to $0.5 million of restructuring charges and $0.4 millionof impairment & divestiture charges in the fourth quarter of fiscal 2020. Thetwelve months ended August 31, 2021 excludes $2.1 million of restructuringcharges and $0.5 million of net impairment & divestiture charges compared to$4.5 million of restructuring charges, $3.2 million of net impairment &divestiture gains and $0.4 million of purchase accounting charges in the twelvemonths ended August 31, 2020.

* Fourth quarter fiscal 2021 net sales were $134.8 million, 31% higher than the prior fiscal year's fourth quarter net sales. Core sales increased 28% year over year, with the impact of foreign currency increasing net sales by 3%. * The increase in revenue is attributable to the broad-based market recovery, as our largest regions of the world returned to more normalized levels of activity. * Adjusted operating profit margin of 19.9% in the quarter increased year over year primarily due to increased sales volume and savings from cost management and restructuring initiatives implemented in prior periods, despite increased material and freight costs.

Corporate Expenses and Income Taxes (excluding non-GAAP adjustments)

* Corporate expenses from continuing operations of $6.5 million for the fourth quarter of fiscal 2021 were $0.4 million higher than the comparable prior year period, primarily resulting from higher equity compensation, insurance and consulting costs. * The fiscal 2021 fourth quarter effective income tax rate from continuing operations of approximately 36% was lower than the fourth quarter fiscal 2020 rate of approximately 51%.

Discontinued Operations

Discontinued operations represent operating results for the divested EC&S segment through the October 31, 2019 completion date of the divestiture, as well as impacts from certain retained liabilities subsequent to the completion date.

Balance Sheet and Leverage

(US$ in millions)

Period Ended

August 31, 2021 May 31, 2021 August 31, 2020

Cash Balance $140.4 $136.3 $152.2

Debt Balance $175.0 $195.0 $255.0

Net Debt to Adjusted 0.6 1.1 1.8EBITDA**



Net debt at August 31, 2021 was approximately $35 million (total debt of $175 million less $140 million of cash), which decreased approximately $24 million from the prior quarter. Net Debt to Adjusted EBITDA from continuing operations was 0.6x at August 31, 2021.

**Calculated in accordance with the terms of the Company's March 2019 Senior Credit Facility

Outlook

Mr. Baker continued, "As we look ahead to the next fiscal year, we are encouraged by our strong backlog, resulting from solid order rates in the fourth quarter. While our largest regions showed encouraging levels of product recovery in the quarter, not all were back to pre-COVID levels. Supply chain constraints, increased commodity costs, logistical shortages, as well as continued slow recovery in certain regions, are expected to create headwinds into fiscal 2022. We anticipate sales to be in the range of $590 million to $610 million for full year fiscal 2022, with the return of our more typical quarterly seasonality. Incremental Adjusted EBITDA margins are expected to be 35% to 45% for the full year, excluding the impact of currency."

CEO Transition

In a separate press release issued today, the Company announced the retirement of Randy Baker as President & CEO and announced the appointment of Paul Sternlieb as President & CEO, both effective October 8, 2021.

Mr. Baker concluded, "It has been an honor to be the President & CEO of this organization for the past 5 years. We have accomplished a significant transformation of the business in a short period of time. The business is on the path to becoming a best-in-class industrial tools and services company and I am confident that under Paul's leadership as the new CEO of Enerpac Tool Group, the Company will continue to execute on key initiatives and drive shareholder value."

Conference Call Information

An investor conference call is scheduled for 10:00 am CT today, September 29, 2021. Webcast information and conference call materials are available on the Enerpac Tool Group company website (www.enerpactoolgroup.com).

Safe Harbor Statement

Certain of the above comments represent forward-looking statements made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. Management cautions that these statements are based on current estimates of future performance and are highly dependent upon a variety of factors, which could cause actual results to differ from these estimates. Among other risks and uncertainties, Enerpac Tool Group's results are subject to risks and uncertainties arising from general economic conditions, supply chain risk, material and labor cost increases, the COVID-19 pandemic, including the impact of the pandemic or related government responses on the Company's business, the businesses of the Company's customers and vendors, and employee mobility, and whether site-specific health and safety concerns related to COVID-19 might require operations to be halted for some period of time, volatile oil pricing, variation in demand from customers, the impact of geopolitical activity on the economy, continued market acceptance of the Company's new product introductions, the successful integration of acquisitions, the impact of restructurings, operating margin risk due to competitive pricing and operating efficiencies, tax law changes, foreign currency fluctuations and interest rate risk. See the Company's Form 10-K for the fiscal year ended August 31, 2020 filed with the Securities and Exchange Commission for further information regarding risk factors. Enerpac Tool Group disclaims any obligation to publicly update or revise any forward-looking statements as a result of new information, future events or any other reason.

Non-GAAP Financial Information

This press release contains financial measures that are not measures presented in conformity with GAAP. These non-GAAP measures include EBITDA from continuing operations, adjusted EBITDA from continuing operations, adjusted earnings (loss) from continuing operations, adjusted diluted earnings (loss) per share from continuing operations, adjusted operating profit from continuing operations, segment adjusted operating profit and net debt. This press release includes reconciliations of historical non-GAAP measures to the most comparable GAAP measure, including in the tables attached to this press release. This press release does not include a quantitative reconciliation of non-GAAP measures presented for any future period as such a reconciliation is not practicable. Such future-period measures are presented in a manner consistent with the presentation thereof for historical periods. Management believes the non-GAAP measures presented in this press release are commonly used financial measures for investors to evaluate Enerpac Tool Group's operating performance and financial position with respect to the periods presented and, when read in conjunction with the condensed consolidated financial statements, present a useful tool to evaluate ongoing operations and provide investors with metrics they can use to evaluate aspects of the Company's performance from period to period. In addition, these are some of the financial metrics management uses in internal evaluations of the overall performance of the Company's business. Management acknowledges that there are many items that impact a company's reported results and the adjustments reflected in these non-GAAP measures are not intended to present all items that may have impacted these results. In addition, these non-GAAP measures are not necessarily comparable to similarly titled measures used by other companies.

About Enerpac Tool Group

Enerpac Tool Group Corp. is a premier industrial tools and services company serving a broad and diverse set of customers in more than 100 countries. The Company's businesses are global leaders in high pressure hydraulic tools, controlled force products and solutions for precise positioning of heavy loads that help customers safely and reliably tackle some of the most challenging jobs around the world. The Company was founded in 1910 and is headquartered in Menomonee Falls, Wisconsin. Enerpac Tool Group common stock trades on the NYSE under the symbol EPAC. For further information on Enerpac Tool Group and its businesses, visit the Company's website at www.enerpactoolgroup.com.

(tables follow)

Enerpac Tool Group Corp.Condensed Consolidated Balance Sheets(Dollars in thousands)(Unaudited) August 31, August 31, 2021 2020

AssetsCurrent assetsCash and cash equivalents $ 140,352 $ 152,170

Accounts receivable, net 103,233 84,170

Inventories, net 75,347 69,171

Other current assets 38,503 35,621

Total current assets 357,435 341,132

Property, plant and equipment, net 48,590 61,405

Goodwill 277,593 281,154

Other intangible assets, net 54,545 62,382

Other long-term assets 82,084 78,221

Total assets $ 820,247 $ 824,294

Liabilities and Shareholders' EquityCurrent liabilitiesTrade accounts payable $ 61,958 $ 45,069

Accrued compensation and benefits 21,597 17,793

Income taxes payable 5,674 1,937

Other current liabilities 45,535 40,723

Total current liabilities 134,764 105,522

Long-term debt, net 175,000 255,000

Deferred income taxes 4,397 1,708

Pension and postretirement benefit liabilities 17,783 20,190

Other long-term liabilities 76,105 82,648

Total liabilities 408,049 465,068

Shareholders' equityCapital stock 16,604 16,519

Additional paid-in capital 202,971 193,492

Treasury stock (667,732 ) (667,732 )

Retained earnings 953,339 917,671

Accumulated other comprehensive loss (92,984 ) (100,724 )

Stock held in trust (3,067 ) (2,562 )

Deferred compensation liability 3,067 2,562

Total shareholders' equity 412,198 359,226

Total liabilities and shareholders' equity $ 820,247 $ 824,294

Enerpac Tool Group Corp.Condensed Consolidated Statements of Operations(Dollars in thousands, except per share amounts)(Unaudited) Three Months Ended Twelve Months Ended August 31, August 31, August 31, August 31, 2021 2020 2021 2020

Net sales $ 145,427 $ 111,353 $ 528,660 $ 493,292

Cost of products sold 79,158 66,888 285,504 276,099

Gross profit 66,269 44,465 243,156 217,193

Selling, general and 45,215 37,672 175,277 180,513 administrative expensesAmortization of intangible 1,843 2,156 8,176 8,323 assetsRestructuring (benefit) (37 ) 987 2,392 7,335 chargesImpairment & divestiture 5,659 408 6,198 (3,159 )charges (benefit)Operating profit 13,589 3,242 51,113 24,181

Financing costs, net 870 3,307 5,266 19,218

Other expense (income), net 275 (1,205 ) 1,872 (2,886 )

Earnings before income tax 12,444 1,140 43,975 7,849 expense Income tax expense 5,895 943 3,763 2,292

Net earnings from continuing 6,549 197 40,212 5,557 operations(Loss) earnings from (1,283 ) 1,242 (2,135 ) (4,834 )discontinued operations, netof income taxesNet earnings $ 5,266 $ 1,439 $ 38,077 $ 723

Earnings per share fromcontinuing operationsBasic $ 0.11 $ 0.00 $ 0.67 $ 0.09

Diluted 0.11 0.00 0.67 0.09

Loss (earnings) per share fromdiscontinued operationsBasic $ (0.02 ) $ 0.02 $ (0.04 ) $ (0.08 )

Diluted (0.02 ) 0.02 (0.04 ) (0.08 )

Earnings per shareBasic $ 0.09 $ 0.02 $ 0.63 $ 0.01

Diluted 0.09 0.02 0.63 0.01

Weighted average common sharesoutstandingBasic 60,205 59,773 60,024 59,952

Diluted 60,678 60,004 60,403 60,269

Enerpac Tool Group Corp.Condensed Consolidated Statements of Cash Flows(In thousands)(Unaudited) Three Months Ended Twelve Months Ended August 31, August 31, August 31, August 31, 2021 2020 2021 2020

Operating ActivitiesCash provided by operating 29,491 12,638 54,860 17,999 activities - continuingoperationsCash used in operating (197 ) (94 ) (677 ) (21,158 )activities - discontinuedoperationsCash provided by (used in) 29,294 12,544 54,183 (3,159 )operating activities Investing ActivitiesCapital expenditures (2,515 ) (2,745 ) (12,019 ) (12,053 )

Proceeds from sale of 8 73 22,409 708 property, plant andequipmentProceeds from company - - 2,911 - owned life insurancepoliciesCash paid for business - 136 - (33,298 )acquisitions, net of cashacquiredProceeds from sale of - - - 10,226 business, net oftransaction costsOther investing activities - (135 ) - (710 )

Cash (used in) provided by (2,507 ) (2,671 ) 13,301 (35,127 )investing activities -continuing operationsCash provided by investing - 2,809 - 211,200 activities - discontinuedoperationsCash (used in) provided by (2,507 ) 138 13,301 176,073 investing activities Financing ActivitiesPrincipal repayments on (20,000 ) (40,000 ) (90,000 ) (140,000 )term loanBorrowings on revolving - 295,000 10,000 395,000 credit facilityPrincipal repayments on - - - (175,000 )term loanRedemption of 5.625% - (287,559 ) - (287,559 )Senior NotesPurchase of treasury - - - (27,520 )sharesStock options, taxes paidrelated to the net share 160 31 128 (1,428 )settlement of equityawards & otherPayment of cash dividend - - (2,394 ) (2,419 )

Cash used in financing (19,840 ) (32,528 ) (82,266 ) (238,926 )activities - continuingoperationsCash provided by financing - - 750 - activities - discontinuedoperationsCash used in financing (19,840 ) (32,528 ) (81,516 ) (238,926 )activities Effect of exchange rate (2,874 ) 8,413 2,214 7,031 changes on cash Net cash increase 4,270 (14,148 ) (11,891 ) (249,023 )(decrease) from continuingoperationsNet cash (decrease) (197 ) 2,715 73 190,042 increase from discontinuedoperationsNet increase (decrease) 4,073 (11,433 ) (11,818 ) (58,981 )from cash and cashequivalentsCash and cash equivalents 136,279 163,603 152,170 211,151 - beginning of periodCash and cash equivalents $ 140,352 $ 152,170 $ 140,352 $ 152,170 - end of period Enerpac ToolGroup Corp.SupplementalUnaudited DataReconciliation of GAAP Measures to Non-GAAP Measures(Dollars in Fiscal 2020 Fiscal 2021thousands) Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4 TOTALSalesIndustrial Tool $ 135,592 $ 123,361 $ 92,865 $ 103,044 $ 454,863 $ 112,175 $ 112,739 $ 133,400 $ 134,811 $ 493,125 & ServicesSegmentOther 11,082 10,025 9,014 8,309 38,429 7,255 7,915 9,749 10,616 35,535

Total $ 146,674 $ 133,386 $ 101,879 $ 111,353 $ 493,292 $ 119,430 $ 120,654 $ 143,149 $ 145,427 $ 528,660

% Sales GrowthIndustrial Tool -9 % -17 % -44 % -29 % -25 % -17 % -9 % 44 % 31 % 8 %& ServicesSegmentOther 12 % -2 % -21 % -39 % -15 % -35 % -21 % 8 % 28 % -8 %

Total -7 % -17 % -43 % -30 % -25 % -19 % -10 % 41 % 31 % 7 %

Operating Profit (Loss) from Continuing OperationsIndustrial Tool $ 25,928 $ 20,963 $ 8,228 $ 12,166 $ 67,284 $ 17,362 $ 14,880 $ 25,304 $ 26,772 $ 84,318 & ServicesSegmentOther 399 (684 ) 21 (1,371 ) (1,635 ) (1,662 ) (1,834 ) 14 (968 ) (4,450 )

Corporate / (11,342 ) (10,349 ) (8,197 ) (6,158 ) (36,045 ) (6,282 ) (6,289 ) (5,808 ) (6,535 ) (24,915 )GeneralAdjusted $ 14,985 $ 9,930 $ 52 $ 4,637 $ 29,604 $ 9,418 $ 6,757 $ 19,510 $ 19,269 $ 54,953 operating profitImpairment &divestiture 1,356 768 1,443 (408 ) 3,159 (139 ) (401 ) - (5,659 ) (6,198 )benefit(charges)Restructuring & (1,972 ) (1,929 ) (3,292 ) (987 ) (8,179 ) (210 ) (649 ) (1,571 ) 37 (2,392 )other exitcharges (1)Purchaseaccounting - (202 ) (201 ) - (403 ) - - - - - inventorystep-up chargeGain on sale offacility, net of - - - - - - - 5,359 - 5,359 transactionchargesCorporatedevelopment and - - - - - - - (551 ) (58 ) (609 )board searchchargesOperating profit $ 14,369 $ 8,567 $ (1,998 ) $ 3,242 $ 24,181 $ 9,069 $ 5,707 $ 22,747 $ 13,589 $ 51,113 (loss) AdjustedOperating Profit%Industrial Tool 19.1 % 17.0 % 8.9 % 11.8 % 14.8 % 15.5 % 13.2 % 19.0 % 19.9 % 17.1 %& ServicesSegmentOther 3.6 % -6.8 % 0.2 % -16.5 % -4.3 % -22.9 % -23.2 % 0.1 % -9.1 % -12.5 %

Adjusted 10.2 % 7.4 % 0.1 % 4.2 % 6.0 % 7.9 % 5.6 % 13.6 % 13.2 % 10.4 %Operating Profit% EBITDA fromContinuingOperations (2)Earnings (loss) $ 6,372 $ 3,918 $ (4,930 ) $ 197 $ 5,557 $ 4,822 $ 3,584 $ 25,257 $ 6,549 $ 40,212 from continuingoperationsFinancing costs, 6,729 4,630 4,552 3,307 19,218 1,716 1,338 1,340 870 5,266 netIncome tax 950 806 (407 ) 943 2,292 2,258 1 (4,390 ) 5,895 3,763 expense(benefit)Depreciation & 4,779 5,277 5,318 5,347 20,720 5,458 5,507 5,473 5,173 21,611 amortizationEBITDA $ 18,830 $ 14,631 $ 4,533 $ 9,794 $ 47,787 $ 14,254 $ 10,430 $ 27,680 $ 18,487 $ 70,852

Adjusted EBITDAfrom ContinuingOperations (2)Industrial Tool $ 28,996 $ 24,022 $ 11,906 $ 15,938 $ 80,862 $ 21,002 $ 18,210 $ 28,873 $ 30,421 $ 98,506 & ServicesSegmentOther 1,275 244 926 (449 ) 1,996 (740 ) (942 ) 897 (133 ) (918 )

Corporate / (10,825 ) (8,272 ) (6,249 ) (5,058 ) (30,406 ) (5,659 ) (5,788 ) (5,327 ) (6,121 ) (22,896 )GeneralAdjusted EBITDA $ 19,446 $ 15,994 $ 6,583 $ 10,431 $ 52,452 $ 14,603 $ 11,480 $ 24,443 $ 24,167 $ 74,692

Impairment &divestiture 1,356 768 1,443 (408 ) 3,159 (139 ) (401 ) - (5,659 ) (6,198 )benefit(charges)Restructuring & (1,972 ) (1,929 ) (3,292 ) (987 ) (8,179 ) (210 ) (649 ) (1,571 ) 37 (2,392 )other exitcharges (1)Purchaseaccounting - (202 ) (201 ) - (403 ) - - - - - inventorystep-up chargePension - - - 758 758 - - - - - curtailmentGain on sale offacility, net of - - - - - - - 5,359 - 5,359 transactionchargesCorporatedevelopment and - - - - - - - (551 ) (58 ) (609 )board searchchargesEBITDA $ 18,830 $ 14,631 $ 4,533 $ 9,794 $ 47,787 $ 14,254 $ 10,430 $ 27,680 $ 18,487 $ 70,852

Adjusted EBITDA%Industrial Tool 21.4 % 19.5 % 12.8 % 15.5 % 17.8 % 18.7 % 16.2 % 21.6 % 22.6 % 20.0 %& ServicesSegmentOther 11.5 % 2.4 % 10.3 % -5.4 % 5.2 % -10.2 % -11.9 % 9.2 % -1.3 % -2.6 %

Adjusted EBITDA 13.3 % 12.0 % 6.5 % 9.4 % 10.6 % 12.2 % 9.5 % 17.1 % 16.6 % 14.1 %%Notes:(1) Approximately $0.8 million of the Q3 fiscal 2020 restructuring & other exit charges were recorded in cost of products sold.(2) EBITDA represents net earnings (loss) from continuing operations before financing costs, net, income tax (benefit) expense, and depreciation & amortization. EBITDA is not a calculation based upon GAAP. The amounts included in the EBITDA and Adjusted EBITDA calculation, however, are derived from amounts included in the Condensed Consolidated Statements of Operations. EBITDA and adjusted EBITDA should not be considered as alternatives to net earnings (loss), operating profit (loss) or operating cash flows. The Company has presented EBITDA and adjusted EBITDA because it regularly reviews these performance measures. In addition, EBITDA and adjusted EBITDA are used by many of our investors and lenders, and are presented as a convenience to them. The EBITDA and adjusted EBITDA measures presented may not always be comparable to similarly titled measures reported by other companies due to differences in the components of the calculation.Notes:(1) Approximately $0.8 million of the Q3 fiscal 2020 restructuring & otherexit charges were recorded in cost of products sold.(2) EBITDA represents net earnings (loss) from continuing operations beforefinancing costs, net, income tax (benefit) expense, and depreciation &amortization. EBITDA is not a calculation based upon GAAP. The amountsincluded in the EBITDA and Adjusted EBITDA calculation, however, are derivedfrom amounts included in the Condensed Consolidated Statements of Operations.EBITDA and adjusted EBITDA should not be considered as alternatives to netearnings (loss), operating profit (loss) or operating cash flows. The Companyhas presented EBITDA and adjusted EBITDA because it regularly reviews theseperformance measures. In addition, EBITDA and adjusted EBITDA are used bymany of our investors and lenders, and are presented as a convenience tothem. The EBITDA and adjusted EBITDA measures presented may not always becomparable to similarly titled measures reported by other companies due todifferences in the components of the calculation.Enerpac ToolGroup Corp.SupplementalUnaudited DataReconciliation ofGAAP Measures toNon-GAAP Measures(Continued)(Dollars inthousands, exceptfor per shareamounts) Fiscal 2020 Fiscal 2021 Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4 TOTALAdjusted Earnings(Loss) (3)Net Earnings $ 2,121 $ 2,162 $ (4,999 ) $ 1,439 $ 723 $ 4,598 $ 3,182 $ 25,031 $ 5,266 $ 38,077 (Loss)(Loss) Earningsfrom Discontinued (4,251 ) (1,756 ) (69 ) 1,242 (4,834 ) (224 ) (402 ) (226 ) (1,283 ) (2,135 )Operations, netof income taxEarnings (Loss) $ 6,372 $ 3,918 $ (4,930 ) $ 197 $ 5,557 $ 4,822 $ 3,584 $ 25,257 $ 6,549 $ 40,212 from ContinuingOperationsImpairment & (1,356 ) (768 ) (1,443 ) 408 (3,159 ) 139 401 - 5,659 6,198 divestiture(benefit) chargesRestructuring & 1,972 1,929 3,292 987 8,179 210 649 1,571 (37 ) 2,392 other exitchargesAccelerated debt 625 - - 1,041 1,666 - - - - - issuance costsPurchaseaccounting - 202 201 - 403 - - - - - inventory step-upchargePension - - - (758 ) (758 ) - - - - - curtailmentGain on sale offacility, net of - - - - - - - (5,359 ) - (5,359 )transactionchargesCorporatedevelopment and - - - - - - - 551 58 609 board searchchargesNet tax effect of (52 ) (57 ) (624 ) (503 ) (1,236 ) (15 ) (100 ) 2,647 (548 ) 1,984 reconciling itemsaboveOther income tax - (74 ) - - (74 ) - (632 ) (7,523 ) - (8,155 )benefitAdjusted Earnings(Loss) from $ 7,561 $ 5,150 $ (3,504 ) $ 1,372 $ 10,578 $ 5,156 $ 3,902 $ 17,144 $ 11,681 $ 37,881 ContinuingOperations (4) Adjusted DilutedEarnings (loss)per share (3)Net Earnings $ 0.03 $ 0.04 $ (0.08 ) $ 0.02 $ 0.01 $ 0.08 $ 0.05 $ 0.41 $ 0.09 $ 0.63 (Loss)(Loss) Earningsfrom Discontinued (0.07 ) (0.03 ) 0.00 0.02 (0.08 ) (0.00 ) (0.01 ) (0.00 ) (0.02 ) (0.04 )Operations, netof income taxEarnings (Loss) $ 0.11 $ 0.06 $ (0.08 ) $ 0.00 $ 0.09 $ 0.08 $ 0.06 $ 0.42 $ 0.11 $ 0.67 from ContinuingOperationsImpairment &divestiture (0.02 ) (0.01 ) (0.02 ) 0.00 (0.04 ) 0.00 0.01 - 0.08 0.09 (benefit)charges, net oftax effectRestructuring &other exit 0.02 0.04 0.04 0.02 0.11 0.00 0.01 0.02 0.00 0.03 charges, net oftax effectAccelerated debt 0.01 - - 0.01 0.02 - - - - - issuance costs,net of tax effectPurchaseaccounting - 0.00 0.00 - 0.01 - - - - - inventory step-upcharge, net oftax effectPension - - - (0.01 ) (0.01 ) - - - - - curtailment, netof tax effectGain on sale offacility, net of - - - - - - - (0.04 ) 0.00 (0.04 )transactionchargesCorporatedevelopment and - - - - - - - 0.01 0.00 0.01 board searchchargesOther income tax - 0.00 - - - - (0.01 ) (0.12 ) - (0.14 )benefitAdjusted DilutedEarnings (Loss) $ 0.12 $ 0.09 $ (0.06 ) $ 0.02 $ 0.18 $ 0.09 $ 0.06 $ 0.28 $ 0.19 $ 0.63 per share fromContinuingOperations (4) Free Cash Flow(5)Cash (used in)provided by $ (22,927 ) $ (5,814 ) $ 13,038 $ 12,544 $ (3,159 ) $ 8,667 $ 4,579 $ 11,643 $ 29,294 $ 54,183 operatingactivitiesCapital (3,187 ) (3,780 ) (2,341 ) (2,745 ) (12,053 ) (1,905 ) (3,725 ) (3,874 ) (2,515 ) (12,019 )expendituresProceeds fromsale of property, 162 288 185 73 708 47 548 21,806 8 22,409 plant andequipmentOther 1,353 122 - 12 1,487 (2 ) (518 ) 4,937 182 4,599

Free Cash Flow $ (24,599 ) $ (9,184 ) $ 10,882 $ 9,884 $ (13,017 ) $ 6,807 $ 884 $ 34,512 $ 26,969 $ 69,172

Notes continued:(3) Adjusted earnings (loss) from continuing operations and adjusted diluted earnings (loss) per share represent net earnings (loss) and diluted earnings (loss) per share per the Condensed Consolidated Statements of Operations net of charges or credits for items to be highlighted for comparability purposes. These measures are not calculated based upon generally accepted accounting principles (GAAP) and should not be considered as an alternative to net earnings (loss) or diluted earnings (loss) per share or as an indicator of the Company's operating performance. However, this presentation is important to investors for understanding the operating results of the current portfolio of Enerpac Tool Group companies.(4) Q3 Fiscal 2020 results included an adjusted loss from continuing operations, therefore adjusted loss per share is not diluted and is, instead, calculated with basic shares.(5) Free cash flow primarily represents the operating cash flow, proceeds from the sale of property, plant and equipment combined with capital expenditures.For all reconciliations of GAAP measures to Non-GAAP measures, the summation of the individual components may not equal the total due to rounding. With respect to the earnings per share reconciliations the impact of share dilution on the calculation of the net earnings or loss per share and discontinued operations per share may result in the summation of these components not equaling the total earnings (loss) per share from continuing operations. View source version on businesswire.com: https://www.businesswire.com/news/home/20210929005199/en/

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