EPAC - Earnings call transcript Q2 2019 | Enerpac Tool Group Corp.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Actuant Corporation's Second Quarter's Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded, Thursday, March 21, 2019. It is now my pleasure to turn the conference over to Barb Bolens, VP, Corporate Strategy, Investor Relations, and Communications. Ms. ahead, go Please Bolens.

Barb Bolens

Good second thank call. quarter Operator. us for for Actuant's XXXX morning you, you and joining Thank earnings conference

the Chief present Baker, to Officer. Dillon, call results Financial On Randy are Actuant's the Chief Actuant's Officer; Executive Company's and and Rick President today

our release earnings on presentation actuant.com in call are for Our at today's the slide available and website Investors section.

go this call it website. Please archive and on will recording to we also X. are We Slide our

profit adjusted and reference non-GAAP measures today's adjusted During we as earnings. call, will such margins

can find are of and to call making reconciliation forward-looking considered would press a in are the non-GAAP today's and like GAAP You release. presentation statements. measures that schedules remind also morning's we in to you are that to not this statements facts We historical

from possible. Harbor results prior those federal in or in anticipated materially have practice our for many the for question results, us We statements and how we Please our that Safe factors to statements. other actual other forward-looking to pursuant may follow SEC one ask provisions see making also cause to differ risks address filings we as for, your Consistent hour that follow-up allow to questions we law. today's participants and to with one an securities Thank keep forecast, order you are calls, from call cooperation. as advance conducted and

we ITS & our may As a or to quarter Components EC&S our reminder segment during and Engineered as Systems or refer first and the Tools in Tools, & call Industrial segment as components. Service as

over to call turn will I the Now Randy.

Randy Baker

good morning Barb everybody. and Thanks

X. Slide on today start Let's

marketing our delivered commitment only to mind, the like our their of were able weather pleased I'm time level delays the of the and As operations a maintaining the significant team incremental management overcome factory businesses special and operations our and you but with Actuant in and to did our that a to high With quarter, solid and in provide teams sales very for read press to achieve on I'd today's performance related not sales quarter. thanks drive delivery. release, customers

for we long on focus As are maintaining XXXX, range we progress our strategy.

growth core yield results both continue in segments. sales Our to initiatives

we quarter, service significantly more and improved the our new sales. During products launched

As Industrial increased XX% exceeding & core sales Services a expectations. result, in by the quarter Tools growth our far the

to to to cost, capture On increasing condition. and to outperforming our market Solution we are we structural vitality strategy prevailing effort of These continue new index. product critical Hydratight our enhancing improves taken the and program the platforms, have costs align Engineered provide achieving and more side, invest actions the product improve ones fully Enerpac that product our an businesses. In development in to are benefit. ongoing and while ability the customers. the new Rick including will serve process our details on better This efficiency our operations

As you progress made major in we our noted strategy. from our announcements management have during the portfolio quarter,

divest final in sale to This of management significant Components will shareholders, businesses, our and our towards resources. the and approach allocation segments. the profitable profitability capital System for focusing Engineered We focusing companies and capital sequential Our action completed the announcing Precision-Hayes is its reaching of improving realigning value while stage. almost & intentions unlock

to Now turning Slide over X.

growth. costs increasing Components This broadly & significant improved & from outstanding markets, and experience we XX% and sales in EPS direct quarter improve categories. ground all organic grew operation, efforts The performance both Service Engineered grew held exceeded by X% demand our second From by Tools year-over-year operating sales by in was earnings year-over-year off-highway across an our and to results realization. result led our sales expectations and while stable service segment. segment XX%. regions good contain on- from we Systems with multiple from Our our our price perspective, primary focus profit Tools operations. on a Core improvement Industrial and

we continue future debt within sheet our range balance the to leverage investments. On maintain and front, the position well the business for desired

I'm and the quarter the results very our the strategy. with of pleased overall, advancement of So

to Moving X. Slide over

advancing noted As our the stage into Actuant. earlier, next reshaping portfolio management strategy and

high industrial is major As with supplier XXXX, also Hydratight well networks market, the bring to tools. entered great two a become in have of operating segments quality maintaining Systems we world's known Actuant operating into one earnings. future focus of we restructured companies company, By have OEMs. on we been most and quality for the of able and serving doing created dealer component systems. in comprised separate service, tools so, two oriented high terms company The The & industrial brands. is leader complete Tools for heavy & Components in two and is complex but outstanding highly profitable, tools new of resources. Industrial Service and Enerpac a business comprised much the capital the and a management world focused segment a growth a of is major stronger industrial Engineered has combination growth

the improved which quality, delivery dramatically our and costs has past preferred qualified years, Our supplier. Actuant two over have as a

has investment and improved product vitality engineering our enabled a the Additionally, sustained in growth.

allocation However, & better served simply ownership. Actuant's the of profit Solutions priorities it profiles and given would cannot the compete in Components, Engineered capital for be

have superior the cash growth pure-play significant value shareholder opportunity earnings, to through tool company, will a As generation. and Actuant create

unchanged. The X. Slide to framework of over our capital allocation Moving priorities remain

shareholders. our value strong strategic And while finally, We acquisitions maintaining a will to look for in for balance always strategy. company tool we'll share first, looking discipline continue ourselves for opportunistic investing sheet support return which to toward repurchases

Rick value. I'll over through and shareholder priorities now Rick to to and you. Rick, these of not creation and over turn I'll very the to the to the Our are market guidance. and long-term changed, the in with go principles and come committed quarter the back outlook call details have I then

Rick Dillon

the of good and business one-time in an corporate X.X charges Starting million of of quarter, all everyone. costs X.X Thanks, Cortland related to additional the morning to the and U.S. related with recorded million Slide our of our impairment development on In Randy, deal X X.X million activities. items. we

certain tax result as Fiscal adjusted adjusting related of to we result the second quarter dollar. with flow the headwind through to If tax turn the for our consecutive X% the offset operating additional quarter. healthy by second impact results. in on this quarter of divestitures incurred Slide from points XXX six a improved incremental sales. during a sales of quarters of a reform. impact revaluation year-over-year expense was strong increased also to for stronger X onto actually X Core the X% of profit basis changes law XXXX X% tax and Adjusted as the million We increased credits sales of of

Our adjusted for in line the effective with income tax rate was expectations. approximately our XX% quarter

expected approximately to XX%. year effective full is tax Our still be rate

and X, third of Our surpassed near X% turn growth. mid-teens second EPS and sales quarter the to guidance by to our quarter here. solid second rate performance was the we Slide six range, year our the expected Adjusted fourth top be guidance. is with end the rate core quarter we X% core of quarter compared consecutive sales to our to If last delivered similar to quarter for in $X.XX $X.XX mid-XX in the

realization executed in within I'll and XX%, and shutdowns new price our we segment results of from color resulted America team growth on slowdowns demand platform some well we flat to ITS growth, by launches, segment sales the core strong challenges Randy comments, which significant EC&S more As saw a North middle provide had chain. as facilities East. The our markets. experience achieve in sales led strong core of in of up opening softer some as whether the offset when discuss his and well end supply the in quarter, Middle these extremely sales we mentioned the in with sales our here individual The to moment. continues core the results by to be

a for summary to turn Let's Slide our performance. top-line of XX

by sales million million XX of which core a which from well approximately the This was as million. as X divestitures, and improvement So, volume X% price. currency headwinds, was offset XX the sales by driven by impact reduced growth,

few cost elimination the operating QX in year-over-year, XXXX and million drive the adjusted continues EBITDA take first products point with standard target, contributed profit line we million If quarter experience year at of noted, improvement. to also the year-over-year. a offering basis on versus with were as our quarter, A adjusted of XXX QX, in of to here, solid improvement X are tariffs. to provided on you Slide line realization review lower profit pricing the sales a X margin items improvement as and overruns this we fiscal XX, look a saw custom we lifting both taken from cost was detailed through lifting heavy Last heavy while in the and sales quarter, We and XXXX, margin flow expectations. Tariffs incremental product in our in the of approximately line actions in volume than earlier price remains profitable. profit fiscal note

to other continue sufficient our pricing tariffs. commodity increases actions that We and to inflationary be cover will expect including

form As XXX XX%, Tariffs would to be it require should we increased likely surcharges. actions discussed QX, of in the further in

costs. launches in to year that certain of to is equity costs, and occur this a recoveries objective did erosion and expenses medical year due compensation to over quarter cash Our due margin increased to cost prevent inflationary the factors not increased a second on number product prior prior new debt claims, including quarter, consulting in extraordinary few bad the year, pressures. SAE timing

the half the We the will of year. rate expect of spin prior year moderate back that versus in

structure move our the that with we cost efficient we is through and As objectives. maintain ensure to an one that process, you aligned need business EC&S divestiture

result, well of program restructuring As and the have driving within structure. as efficiencies as a corporate on Hydratight overall we continued Enerpac the our initiated our integration focused businesses

anticipate run the full-year actions to to to as continue we assessing million the of XX range of EC&S to months rate costs with process XX the expect to range the months, XX of in million these XX business. million. one-time will we completing move in divestiture structure closer corporate We savings We XX and the the XX within our achieve of million

the Growth growth starting demand were back European digits across in by of XX% year. to tools segments in year. Core completed originally Core sales move double-digit be additional Service history. of ITS. XXs. have in tool up up service in and a year-over-year, turn half wrap-up strongest by the the low the key XX, quarters this single demand the across increased Now North our let's in America, exceptionally Slide mid tool to service on to is and prior line and few scheduled led all attributable fairly with project was projects regions large was driven core Middle-East. second strong scoping segment of with were had sales we high ITS by the through we and and to one combined will the for detail

HLT improvement category margins and Our project of he the one business away line of the in special year, XX% is down primary range in to our with the as year-over-year. product XX%. drivers from our them and profit was losses moved the which segment target prior the were of with for Incrementals lower associated

on were million, Fibron XX, EC&S the the stronger reduction. sales core of to and divestiture Slide overall and by by XX Precision-Hayes an reduced X% reduced sales Cortland Turning in resulting dollar in the XX% flat quarter, sales year-over-year

for wins done were and improvements sales market by overall and volume partially in and the pricing remains yet off on stable. platform highway conditions slightly New quarter line top actions lower offset

markets. sales volumes we other saw Our and quarter flattish of down open were during our demands the across all cable

lower where as expected and the pricing improved last Profit as China freight over we saw basis both first quarter. segment a the truck to points result impact in the sales second of XXX are margin stabilizing overtime year-over-year, increased the operational as As and primarily and volumes of improved sales year including well warranty we divestiture. compared cost efficiencies, the over quarter

time. to million quarter, liquidity significantly were quarter year-over-year, of CapEx also normal shipments attributable and our we the the line expectations million up and fitness in business. cash deferred hand. Turning saw ended Slide XX, really with now with higher to and XX to receivable as conditions. year-over-year Accounts we used seasonality's for during cash on quarter cash weather a approximately on increased $X We of revenue in taxes $XXX million the attributable result later

was QX, loan During priority. by with the to sequentially forma capital show our EBITDA debt measured steady net per down from by allocation improvement substantial quarter term which our consistent million XXXX. we $XX Leverage pay

in to at back We down We over the at end range second from of the times With of to quarter the I'll X in remain of our you. times are X.X preferred X.X middle call currently that, the year. prior Randy the X.X. turn right

Randy Baker

Thanks Rick.

move demand and growth to from have experienced to move our show market the markets America while the remain sequential largely Slide over let's continues on XX. to outlook Now European stable quarter. factors unchanged first Macroeconomic North slowing.

the in the the be in an industrial continued equipment Off-highway conditions stated, demands. experience forecasted through service Slide XXXX and stable earlier XX. second for our performance year tools creating first half our component X%. globally, maintaining our sales and businesses and America. growth being on-highway, rate, quarter have lower mobile mid-single-digits. X% sales and year to sales over tools Components to turn We're Industrial projections. of and a continue rate are reflected full services estimate at And XXXX between core the our expected moving X% between with As X% Then strong are The half market, improved -- a in the the to and although for environment unchanged is Systems with which increased to projecting full we projections in healthy are core guidance. Engineered the & and revenue from in energy North for growth remain grow mid-single-digits, second grow the manufacturers future

full projecting we for the of X% X% half. second mid-single-digits the in are the between and growth year On basis, consolidated and

year moving Full billion EPS is XX% $X.XXX unchanged guidance to $XX double XX. in Now $X.XXX full rate for XXXX. tax of incurred We're XX% to Slide between over and the billion. a at the the XXXX divestitures about year our the recent rate maintaining range and $X or effective that including remains

to $XX million $XX rate the and to finally, cash flow $XXX of be XX% $X.XX in an million and million. projected quarter share million between And between $XXX per sales EPS are third with effective Our and XX%, tax remains free unchanged mid-teens.

open all of for prepared Thank divestitures. That always, let's guidance questions. for you. our it today. impact Operator, concludes up As excludes remarks future the acquisitions and/or

Operator

with from line comes of [Operator Instructions] question Mig Our a first Dobre Baird.

Your open. line ahead. Please is go

Mig Dobre

quarter, If the midpoint to the you're can for getting me revenue guidance on to I how third the may walk mean, I start about year-over-year. clarification you're know growth? core with just to a wise going you mid-single-digit down be X.X you

to I I'm versus understand follow-up And So FX there. got maybe divestitures? then trying

Rick Dillon

a high and that was quarter couple in quarter, to back kind quarter should X prior that look a back that we the you which at remember X the if was When we things, half of had peak year, not be. our half in of back that you half, unusual had third fourth our it an extremely a

comparisons, And much year. more QX to so when a we've we're in saying X got X finish than last so driven on stronger the strong

highest that Some with and of a QX on moderated back normal being will to tool our the timing us get back of for is service down. flow associated quarter QX kind tools That side.

and QX. of of to more and timing normal from anything flow really a in the a will it somewhat through in It in to So QX our the perspective, saw that's is but to X market businesses. side down than be going that X right the be in a you're to QX, caused see X of kind X reflection growth not you core

Mig Dobre

from $XXX the quarter, drag midpoint are Just talking is When to your expected how understand, a are, here. third I'm get do how much divestitures? of your be about specific third million I'm we FX trying much the how of impact the and the to in divestitures, guidance. what is

Rick Dillon

So to X quarter. that's this a X

impact the the around net is million out so X and And midpoint quarter. that is quarter the divestiture and you X XXX. the is the guidance The between to somewhere for FX on to million XX should

Mig Dobre

it third versus Can something on quarter. significant EBITDA it dynamic Is boosting margin? implies well. us If And that's help mix? here? you it looking this incremental pretty think through a it the else as sequentially question then in revenue savings? maybe EBITDA, Is margin I'm on margin the Is

Randy Baker

if Mig, our incremental the get margins by answer quickly. you'll So, always pretty look you segments, to at

XX% this between range. business ES XX-ish On as And land. in we’ve it's to to business and margins drive incremental side margins a on the that's going lower incremental obviously, said, we're and the side, XX% that's that the going tool where always

net land then the quarter. the second seen just can for where quarter. the and be should There expansion in out margin you all we're to we expectation, have that's third quarter in as margin the if good them apply advancements, to our third that and So, you quarter we've going

on So I that don't that's the a see horizon anything that. on the that we've with delivering could basis. objective. But that And damage demonstrated capable we're now regular

that on have do Rick, comments other any So topic?

Rick Dillon

mean, how of I think well I that No. I as at terms incremental. look that's would the in it

Mig Dobre

one squeeze more. I'll then And

this potential should gone? In is potential in how terms EC&S the terms once to we about synergies the to announced, of that the that program going think the you're you've of relative have restructuring -- of

Rick Dillon

there, was as is and streamline So regional plan looking efficiencies is is if segments on structure there and an an post is some you look are elements to elements of is talked that we IT&S two we where and there the corporate kind key the structural really opportunity is about today involve EC&S operations. efficiencies there within it overall operational will SAE business largely that divestiture there structure, our The I grow there then driving the around between at to operating facilities mean we've that. announced two

segment gain in and -- on that we so of then level cost short-term. that And level there in synergies the top some is corporate lower can

actions Randy's of about right us XX, incremental alone, expand gives guys that allow size are EBITDA that benefits normalized that also comments segment but our it to to beyond, structure. to really these the So, the you us margins allows us beyond or

this EBITDA of a out we going as on XX% that So business. or come margin a basis consolidated forward, can incremental

announced savings It's maybe action. with should say corporate done start, substantially a the facility actions we I run majority be rate facility so fourth in Obviously or quarter, see to people EC&S at and how So fiscal will savings XX probably movement. just our headcount segments with of on we you combination move get some those and some the we we that as to we've actions. to see handle more mid-XX will executed where some of will that, divestiture. look as all closer be of in The that's what side should

to changes costs nature and that forward. the on the will of the remaining true up some corporate additional We pending we but that even have of take look that, were structural and going likely as they closer that's be transaction a at and actions here result takes make, how

Operator

Thank you.

Our next Brady question SunTrust Humphrey. comes from with Charley of line Robinson

line open. is Your Please ahead. go

Charley Brady

I just are but out want a Are that segment if within itself? going know on as it this this divestiture the to you our miss not, business I piece distinct looking don’t or unit? single is at I you because

Randy Baker

that we've our didn't several Charley, moment certain group out strategy, seen, So OEMs. a years of actuation defined as preparing has created which group relationship have spent you've we, of a control serve businesses which this pretty a companies, for where taking to motion consolidated

So company process itself we're it's sold being valuable. synergies would see precision type the is would types remaining because how And and is our one buyer proceeding. business to distinctly separately is went Cortland why that why marketing, of Fibron that's bring the Cortland it was haze how as and customer marketed also is was or sell and exactly together separately. sold in us doesn’t different it separately. objective That's to piece And why that's

to we've properly that and process pretty pleased prepare think got we're we is thus far. with it the So

Charley Brady

year of beyond of and Is or you might get timing this when indication there think by that? fiscal done end any is

Randy Baker

Well, the a questions lot of of kind anticipate surrounding divestiture. we

values midst as speak. we're can. obviously you to we give that try things nature the I'll timing right So I proceeds We of the or of as can't in as process because clear be

obvious keep So to proceed the terms our on going in on as we clarity certain announcements making a be will we lot But you public that values to clarity, reasons. But just objective give we're be our detail and analyst hit investors on. milestones, the process, I can we speed when provide for clarity. to adding up to provide is the of try as community what's of can't where

Charley Brady

you've -- margin? pulled that of business year-over-year segment, of No, on to that a business the decent part services the, that Does just understood. a still of have of Particularly half on instead looking the up kind wondering or that completed forward nice on wondering impact I'm there, standpoint that industrial from on second we pretty the half. XQ? have for commentary tools into being in that. uptick XH was given is margins a services I'm seeing tools tends project what's some the that margin QX, second I'm the in business

Rick Dillon

in tools We're business. still the up year-over-year

say work is timing is to the when was no impact when With going going we activities, there the more real that service margin forward be the done. subject of

there's back of thing so we the our on that is we no specialty, to when specialty And service work. service think talked commodity what quarters service. margin And getting remember now several service out to about the you in on call work, type for focusing the half pressure we that really we're

the guide work our we're in that continue year see doing is, more path that, be deliberate unusual service focus in it you expectation will and back we that'll an will in much it saw far level QX. the about being that in the that So half that more isn't because But profitable service work. of that do. service the at There reflects

in other our QX working of actually growth that or saw we and And timing benefits of scope out project kind specific scope and tool on in we I'm as we some phasing into growth also, benefits on we sorry, then And to definitely, not quarter. so the the some both to it's on the so, some -- When large happens tools side field. QX some projects, ahead, about we service work pull the had more and into for have the of in talked a the QX. bank were

Randy Baker

company's company of composition either large footprint is comment which very, I on focused very and and add service that just a to wanted the tool extremely high profit rental is footprint that. combination our product is very at margin. to margins The percentage Charley, at our two do of so analysts very our makes of throughout year. XX% lot our meetings stream, that revenue, percentage of a the profitability. revenue and scenario. our winnable a and tools profitable provide detail And company, structurally as and of when what large those services high of and you sales one revenue comprising comprised XX% a we a and/or we that's of very a also have your It's your

great job So we able thing additive the equipment. world, our services a as rent run to sites we’re around

we We’re high able and going to to where focus but margins big very it's be sometimes sell never so our a on equipment, service margin sit, the portion. complex

Charley Brady

for more And one just me.

supply on You you little bit that you mentioned just quarter. a in Can are? where the some slowness experienced that elaborate you chain

Rick Dillon

some not more in days We that were had so facility We delays. they -- polar shut had related We weather actually was, That the some down. during was of quarter, moving. vortex. the had our our

now But and have in think an it cost to able quarter. so, delivery. a impact perspective. And back things were us, in volume profitability we and a February track about the the mid-quarter We get But back on is to finish are recover from of a just did to way did quarter. talked we slowdown, running smoothly kind back we our on-time in through get made huge

Operator

Our the from from comes Fargo. question Allison line next of Poliniak Wells

ahead. go is open. line Please Your

Allison Poliniak

Rick, project talk that service, bit you finishing that to a about sooner. had going Just

the impact revenue you side. just can with you guys half about were normalization quantify I side, could talking us back the profit year? is, the But the what sort in help the maybe of you of understand what If guess about the

Rick Dillon

as we separate. I think where clean guide getting without serve

is, I the QX of was year. in was we're work. there relative incremental it's the completion this to of It all to you think relative the to the timing trying real project. our for revenue There just saw guide the say no revenue

sooner of work. that's about indication the able as where granular an that year know, It's last now paced And relative large and but won we activities as an they not that project to so It's we all market. of work done it's just, a out, had we I the a required anticipated. were indication there not had I of get project, the to get can I'm, ago is than

QX majority So a finished of it QX, have majority within QX. our versus little bit in just in what forecast, in been

Allison Poliniak

in way, So incremental sorry, other estimate I components segment another in guess, and the it to the relative a to quarter your wasn't were huge the upside asking to that? there

Rick Dillon

Well, the upside…

Allison Poliniak

components Other to that?

Rick Dillon

it was big on the have an growth core to our on a our Yes, does It impact and to core it have did relative not expectations for year. quarter. relative growth the for the expectations impact

And so that's what we're saying.

Allison Poliniak

just And price of a then on at looking of Any multiple leverage range. sort color you're is in you're out your that moving of decent to sort the environment, acquisition that on things the seeing there?

Rick Dillon

certainly provide tool value a to multiple I believing numbers want third I any we're looking support provider. best our strategy want out investigating the I with. that to because people don’t we ability that related tell may get Well, to that want clarity at is Multiples, meaningful larger, particular I don't more publicly range desired there we've become but this speak companies to it tool, deals. to what got negotiate will companies our later that and establishes to and a the very tool can, of damage to acquisitions and don't our want that working active a pipeline be we're

and will a a priorities really continue I'm to our disciplined think certainly in is pure company. capital and And fit about working -- the that. this lot several hard the hear are to in we businesses those pipeline, kind as for allocation company work not find we identify make they going more if I you're will be unless have company tool we tools acquisitions play involved forward you'll that a to great personally and extraordinarily So you our can as it good we of move

Operator

Our from line next comes Hammond with question of Markets. Jeff KeyBanc Capital

Your ahead. open. go Please line is

Jeff Hammond

in the it So to this but the and at you service digit first I timing back the X half guidance maybe better. noise looking just doing worst-case I'm from plus some issue, like in the mid-single there are X% tools seems is know going with off

seems seeing just half the it So what and guide? like what match already you're miss in you there's did for between the second a versus half the full-year first

Randy Baker

four to want an what and still I we and you and what that environment an think X of and it could march Well, half between in and to we to only expectations the mid-single larger tool nature got service the complete, as XX, number don’t guide to that our to the services guidance, of your in three it, for but keep -- tools one guide there half of the miss think be and but expectation to the the out hard as have projects quarter want know core service realistic on sure number. X if the why in combination sound why, lumpy the we we provide does year side in the in back do of we reality there we we commentary pretty half optimistic benefit quarter we and a second revenue to for we're going our Rick is of that a first been I credibility business create the always we back we going fact in extent were is based the line sales told making our growth in XX% digits. The we it's expected with when to want that forward never quarter create come digit going can get volume did we've and that fact hard by. has that chance The do can in know is the pretty where the that Jeff, that right were on So still but mid-single close make to some don't half standing so can that's

Rick Dillon

keep come half the service to in the will see the sequentially So thing down able in growth. mind of Jeff, when other not we and that and being that's back talk about the to part

saw we of the relative fourth we we the thing other 'XX. of 'XX comps quarter strong back half are in so The in in as the in really what mid-teens have to tools

that see upside feel should we So it are the we X hopefully giving estimate. fair X like mathematically like We raise to more to growth. looks like but

Jeff Hammond

just one. then And last

think what You I and kind medical the in the kind claims of there. of way and versus the SG&A kind trend? Is higher talked there close to was out, about or one-time abnormal numbers some kind one-timers of think of the you

Rick Dillon

$X think versus that’s or of growth. probably million I up. million $X inflation, we're SAE normal that about normal $X just million I think And onetime-ish

Jeff Hammond

Okay.

that is of So about a kind million there's to way like of of it? one-timers, think the couple

Rick Dillon

comp one-timers of even year of inflation couple equity is more would million couple one-timers, in $X salaries A just increase and stuff normal of to that -- didn't happen of it than a be or then million rest and like there this that. that in the $X either there's And year the occurred in growth the call million current of year. about million one-timers prior that

Operator

line a Research. from of Justin comes next Bergner with Our question G.

open. is go Your Please ahead. line

Justin Bergner

Thank you, you, Rick. Thank Randy.

regards better guess mix -- the what in Tools tracking effect question of the Was I effect expectations? question outside timing service any would And there? Industrial First were I the parts mix business, Industrial be than of guess your of second there this Tools.

Randy Baker

margins profitable. next XX% we’ve are got the north within tool line side, our certain we've lines across of all are there as on that On tools. the platforms are that But our talked, very

I that dragged year-over-year question which a think impact, the great we bolting do was sell HLT the stop about event. this platform? the significantly year didn't point mix mix last it's standpoint see last some deal product the But last from year's margin to a I'm can I down and through of and more So impact year. a had line. our the lines, talking painful we at talked year, on mix hoping relative regular of was quite pretty it we was across

fallen quite As rate active had regionally extent. see X% we But a all still a operations within impacts, it's lesser Asia. America and speaking, growth in is to X% active far North little is activity is forecasted. still active. European as Latin lower but very America generally that that to we

margins we we tightly with. called market that pretty and very so we're like pleased And feel the

Justin Bergner

profit effect margins the the $XX operating sort sales in of just were effect but you terms with and said your from then contributions, And your the expectations, in-line was and great. of $XX pricing Okay, million and was contribution million. EBITDA volume

to with it just comment to appears wondering margins with line -- contribution So I'm what that your how of in the reconcile be stronger was expected sort where you them?

Rick Dillon

the I'm guess, repeat I can sorry. you again? So question

Justin Bergner

was you $XX help than I over And pricing volume your within and $XX there expect the be reconcile and million, plus on seems Sure, curious effect would that? just million and what of way $XX that pricing business? million. was sales was $XX if contribution volume sales your higher effect profit EBIT on just the million to was of margin in some to bridges,

Rick Dillon

think couple things the is happening. of there -- I a

pricing of have X the XX we million the pricing -- volume a have X pricing that the tariff then you through with got of flow of goes We you million, away -- and portion million. of about

in missing think at only impact thing the terms incremental an there of of us that the look I you're is you when the boost. So divestitures margin expansion, giving

to from down, of -- the was million decrease only volume heavy a although of product, X X got standard significantly point, with you perspective, losses. lift majority you to heavy So so replaced lift had X but million because that improved million a improved Randy's of of we rid profitability about

of in within through bit tariffs profit. So I mix terms on a operating volume there seeing think and you're little what flow the is of impact

Operator

Instructions]. [Operator

Deane Our Dray of from Capital the comes next RBC with question line Markets.

go Please is open. Your ahead. line

Deane Dray

follow wanted on up restructuring to I action the questions.

size attacking post what of focused might you the be would stranded those what costs Just we clear areas to might on divestiture. that's you these to consider And the case, assuming are sure be what us be costs stranded make for and the frame? can that how the not time I was and

Rick Dillon

cut you -- We out.

your So the I'm of it. We majority you question? missed sorry. Can repeat

Deane Dray

Sure.

addressing this the stranded way us the Just size for that any opportunity not on stranded actions, those, and size helpful. -- be color what you you restructuring post-divestiture can think asking how or -- not costs of take just and to would provide including the attacking might maybe be for costs you be might

Rick Dillon

this objective post transaction XX% about And is we of have Sure. costs. to the EBITDA margin What corporate said is XX announcement, million that business. before restructuring and come we this in out

and corporate EBITDA. SAE you our costs, at the XX% will at to million look you look adjustments have XX in it’s we when to the consolidated that So make to get that

Now, divestiture. a XX you that when at certain as being million in costs, scale there naturally said, result will are that of the costs down look

come others then costs the take size we the of that those that are. will And we so scale be to And business have to there'll actually base. for out appropriately actions of

in transaction, closer to is that So that without -- the cost, need us the et margin we without get be -- the we of providing a standard EBITDA is cetera, know won't will structure part desired transaction know there that until XX%. have to without to because to and the here we get business adjust we

actions announcement, those to of by closer part is there. actions we I part that that be effort allow covered So and other us earlier get as there of as this restructuring get noted then likely

Deane Dray

to part But for it margins? of sought you you're it. gets structure Got XX% though as to going that the sounds

Rick Dillon

at a me going margins. structure, of an we’re XX% to going get efficient that’s minimum to Well, to sought for

Operator

comes Our Duignan the Morgan. from next Ann of line with JP question

Please open. ahead. go is line Your

Abdulrahman Tambal

growth What you Abdul opportunities the answered, ECS of just regions on Hi. focus mine of us This is Tambal been can on update following Ann. would primarily? have you but an give Most divestiture? strategy behalf growth your on your

Randy Baker

we’re been said -- tools trying continue organic and our companies strategies yet. of we've quite good of of products, a one a our our revenue to last investments We've three-year making that's new launched and products there on is a measured XX% We year. launched services year. couple product o of always key framed have launches. getting ground. lot of attributed this and WE’RE Number elements. minimum around new its R&D growth ongoing products new have for a a and We new want not What rolling lot average

below piece lot at that is lot building of of progress great XX% of engineering look creative we our the an with the I over objective real and that's last a years people talent and on just one. -- of group tools couple some and building line so everyday consider basis We’re on now a a made

Secondly better out ever boots market are for respond that. organic the our and years ground We've how we've proven than we've on the going three and cover We we capture been. above than to best added over growth better. dealers sales past we've had. commercially there, we the company better And more condition. We we’re be ever that's

piece that third The is obviously of regional.

past better grown our we a made we’ve couple that stronger still dealers Asia lot We’ve in market. companies footprint Asia market. within We and the over operate a and of progress be Now Pacific years. of Pacific to own of in dramatically like

is how driving elements a delivery and which We M&A. main third component well doing be our efficient costs Then want of then that organic metrics, plans. extremely manufacturing we’re lean three And we and growth the manufacturing are the at operate those So piece quality a side. beyond is now. from quite we be of want driving that to best-in-class to always

original that's coming have So we're we CAGR a organic strategy that. rate of our of XX%, at from coming us of growth, very, if the from said activity, organic half back and M&A give you half to on that's marks look high of side going very of

Now that on part and proven to which can we’re gears into is we've of shift buy supporting company companies run issue big the that tool starting the we the of fact of it. focusing in portfolio, side and the

going be in sites. -- top of that So rate us think if the want you our is still and XX% gives kind to gun CAGR level I our but of growth,

as tool completed standalone company. year, once and company strategy the long-range will gets refresh, a We are who will point our this at that we are later we we reissue what with a for few things and -- we

Operator

BMO Graham Our with next Capital of a question Markets. comes from Scott line

is open. ahead. Please line Your go

Scott Graham

what I just a housekeeping more was were of just annual? could So more for just than Precision-Hayes, this -- could give revenues anything at divestiture, the is you, you hoping us Rick. you

Rick Dillon

Okay.

million For -- Precision-Hayes, $XX about for average overall well, business. million, is revenue on that revenue average $XX

Scott Graham

Were on making there And for Tools of things pre-buys couple pricing? can a ahead sales. us in Just then unbundle you any of okay. Industrial sure, maybe

Rick Dillon

not No, did pre-buys. we see any

one went the of you our -- If beginning first went quarter. for into to recall, effect effect last at tools the pricing the

purchase And on seen pricing for as end from no well. perspective a or so impact we've real our

Scott Graham

Understood. the And sales in in you that cost quarter? that $X EBIT what gave impact, understanding HLT million you of did

Randy Baker

we're down, and million net think down somewhere I X million. X

Scott Graham

that Okay, is or that through number of continues this and is isolated a quarter? that sort

Rick Dillon

to project The the quarter, special second Well, taking any we we it'll you because more was if the of special That significant. end million. indicated volume revenue continues project at year-over-year for revenue replaced standard down. down We be project. net that product special with well, closer revenue drop down off. continues go that to yes, won't to as And $X grow, as standard it recall delta the actually weren't call

a QX higher is rest it impact see somewhat in of year. and So you'll the of the

Scott Graham

that saying really that's this number million actually you're quarter? $X So a

Rick Dillon

I understand. don't

Scott Graham

up? grossed Gross,

Rick Dillon

No.

Scott Graham

On the special projects, no?

Rick Dillon

Well, million. heavy $X about lift technology in is the down quarter

Randy Baker

$XX every that, year. remember, was incurred that comprising you those If to expenses low the do projects. million margins almost million year In and we on extraordinarily projects Scott we between special attempted this as a or $XX is either

just we're simply So not doing.

where lifting projects able hydraulic it been of and and a on still do them. done few very profitably accept But technology we're do we're And we've them profitably. to adapting known selective. we We we've will

at annualized But business an doing one profit million on million think I'd we a than the business basis peak, hit tool I specialized builds. full of will its money projects, we run not we million up own a really that that, it. $X lose on respectable from some much rate rather at $XX once that to $XX do be but very fun about overall So

Robert Graham

segment Last Understood. side? pricing on to be the the split you by question, able sales would

Rick Dillon

tariff we our when won't, look that. have discussions I you I ECS. think it from XX-XX we mean, don't about ITS, at No,

Operator

another We the Research. line Justin with question Bergner from G. have of

Your open. go ahead. line is Please

Justin Bergner

organizational XX your there part reasons restructuring is be, of the restructuring then to didn't cash why begin versus actions, million final And million there I cash why just now costs? million guide. of it XX the a beginning costs absorbing flow million Just is And XX just and sooner would some action now? being free are XX are guess this question that sooner than cash of reasons now, on makes sense to

Rick Dillon

guess. I

yes, of part, of not is it, portion that all it First related to is some a of cash, facilities.

in As the later this will I happen majority quarter. fourth restructuring the noted, of

significant our be and So million to year. shouldn't cash into a is there it -- XX factoring impact XX million flow that isn't the for

we both if That owning This for Enerpac not were of initial Randy leveraging of the Hydratight In here the focus. cost terms the services the we was a opportunity those go-to-market on presence you brand was and some by seeking opportunity merger chime going announced in to aisle across the our did you We first, sides the segments. of do restructuring, improve timing said, reaping of both can recall products that and if benefits of on and of and tool combining businesses brand aisle. the and recall and we to savings purposes. the but focus

seeing We launch. we're in you're have full done that, that,

these there's the now destroy things businesses look do opportunity infrastructure, of do at an to so said And we of was we the because at once. trying weren't to that to all two one going

combined. closely and with of look we're are view with that going infrastructure opportunity to to after service, the market, we where we're go what the opportunities in do clear businesses play strategic have at actually a now the other So where to going both some

execution. strategy is timing the So really driven by

Randy Baker

very Rick covered it well. very,

Justin Bergner

No that’s answer. a great Thanks.

muted. -- a I across little it Just came

million XX this So million, XX is in to the cost not restructuring right? cash the year

Rick Dillon

timing No. won't and be of this That the year, cash to significant due cost the restructure. -- there restructuring

Operator

will further lines you. the to this over at back over the I queued phone up have no call questions We turn time.

Barb Bolens

for you we we you if around Thank in questions be otherwise speaking to everybody with have your June. stay and today. forward again participation look We'll

Operator

thank We the lines. call Ladies that participation you and please and concludes conference ask gentlemen, that for today. for disconnect you your your

Enerpac Tool (EPAC) 21 Mar 192019 Q2 Earnings call transcript