Enerpac Tool Group Corp (NYSE:EPAC) stock fell 4.87% (As on June 25, 1:53:12 AM UTC-4, Source: Google Finance) after the company missed the topline expectations for the third quarter of FY 24. Gross margin expanded 200 basis points year-over-year to 51.8%, driven by benefits from pricing actions, a favorable sales mix, and the disposition of Cortland Industrial. Adjusted operating profit increased 9% to $37.0 million, with an adjusted operating margin of 24.6%, a 290 basis point expansion over the prior-year period. Third quarter adjusted EBITDA was $39.7 million compared to $37.5 million in the year-ago period, achieving an adjusted EBITDA margin of 26.4%, up 240 basis points from 24.0% in the third quarter of fiscal 2023. Net cash provided by operating activities was $30.3 million for the third quarter of fiscal 2024 as compared to $17.3 million in the prior-year period. The increase in cash from operations was primarily due to lower ASCEND transformation payments as well as higher net earnings. In addition, the Company continues to drive improvements in working capital management and inventory efficiency.

EPAC in the third quarter of FY 24 has reported the adjusted earnings per share of 47 cents, which is inline with the analysts’ estimates for the adjusted earnings per share of 47 cents. The company had reported the adjusted revenue decline of 3.8 percent to $150.4 million in the third quarter of FY 24, missing the analysts’ estimates for revenue of $153 million. Organic sales, excluding the disposition of Cortland Industrial and the impact of foreign currency, increased 1.2% year-over-year, with service revenue growth of 7.3% and flat product sales. Net sales growth for the Industrial Tools & Services (IT&S) reportable segment was 1.3%, with organic sales growth of 1.8%, partially offset by a year-over-year decline at Cortland Biomedical, which comprises the Other operating segment.

Additionally, net debt on May 31, 2024, was $63.3 million, resulting in a net debt to adjusted EBITDA ratio of 0.5x. The Company repurchased 71,536 shares of its common stock in the third quarter of fiscal 2024 for a total of $2.6 million. There are approximately 2.9 million shares remaining under the 10 million share authorization announced in March of 2022.

The company said it now expects fiscal 2024 net sales between $585 million and $590 million. The previous guidance was net sales between $590 million and $605 million. One analyst polled by Capital IQ expects $596 million.