Enerpac Tool Group Corp (NYSE:EPAC) stock rose 5.32% (As on December 20, 12:39:31 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the first quarter of FY 24. The product sales were up 4.2% and service revenues were ahead 10.1%. Net sales growth for the Industrial Tools & Services (IT&S) reportable segment of 7.6%, with organic growth of 5.8%, was partly offset by a year-over-year decline at Cortland Biomedical, which comprises the Other operating segment. Gross margin expanded approximately 360 basis points year-over-year to 52.3%, driven by operational improvements related to ASCEND, favorable sales mix, volume leverage, carryover price increases from fiscal 2023, and the disposition of Cortland Industrial. Adjusted operating profit increased 40% to $32.4 million, with an adjusted operating margin of 22.8%, a 620 basis point expansion over the prior-year period. First quarter adjusted EBITDA was $34.9 million compared to $26.6 million in the year-ago period, achieving an adjusted EBITDA margin of 24.6%, up 550 basis points from 19.1% in the first quarter of fiscal 2023.

Net cash used by operating activities was $6.7 million for the first quarter of fiscal 2024 as compared to $17.5 million of cash provided by operations in the prior-year period. The decrease in cash from operations was primarily due to the timing of annual incentive compensation payments along with payments made for the ASCEND transformation program. In fiscal 2023, the annual incentive compensation payment was recorded in the second quarter. Net debt at November 30, 2023, was $96.5 million, resulting in a net debt to adjusted EBITDA ratio of 0.9x. The Company repurchased approximately one million shares of its common stock in the first quarter of fiscal 2024 for $26 million under its share repurchase program announced in March 2022.

EPAC in the first quarter of FY 24 has reported the adjusted earnings per share of 39 cents, beating the analysts’ estimates for the adjusted earnings per share of 29 cents. The company had reported the adjusted revenue growth of 1.9 percent to $142 million in the first quarter of FY 24, beating the analysts’ estimates for revenue of $138.1 million.

The Company affirms its fiscal 2024 guidance, projecting a net sales range of $590 million to $605 million. The forecast anticipates organic growth of approximately 2% to 4%, with expected adjusted EBITDA in the range of $142 million to $152 million, and free cash flow between $60 million to $70 million.