10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 10-Q

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(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 28, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 1-11288 

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ENERPAC TOOL GROUP CORP.

(Exact name of registrant as specified in its charter)

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Wisconsin	39-0168610
(State of incorporation)	(I.R.S. Employer Id. No.)

N86 W12500 WESTBROOK CROSSING

MENOMONEE FALLS, WISCONSIN 53051

Mailing address: P. O. Box 3241, Milwaukee, Wisconsin 53201

(Address of principal executive offices)

(262) 293-1500

(Registrant’s telephone number, including area code)

  ————————————

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Ticker Symbol(s)	Name of each exchange on which registered
Class A common stock, $0.20 par value per share	EPAC	NYSE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☒	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ☐ 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.):    Yes  ¨    No  ☒

The number of shares outstanding of the registrant’s Class A Common Stock as of March 18, 2022 was 60,551,177.

TABLE OF CONTENTS

	Page No.
Forward-Looking Statements and Cautionary Factors	1
Part I—Financial Information
Item 1—Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Statements of Earnings	3
Condensed Consolidated Statements of Comprehensive Income (Loss)	4
Condensed Consolidated Balance Sheets	5
Condensed Consolidated Statements of Cash Flows	6
Notes to the Condensed Consolidated Financial Statements	7
Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3—Quantitative and Qualitative Disclosures about Market Risk	24
Item 4—Controls and Procedures	24
Part II—Other Information
Item 2—Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 6—Exhibits	26

FORWARD-LOOKING STATEMENTS AND CAUTIONARY FACTORS

This quarterly report on Form 10-Q contains certain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. Such forward-looking statements include statements regarding expected financial results and other planned events, including, but not limited to, anticipated liquidity, anticipated restructuring costs and related savings, anticipated future charges and anticipated capital expenditures. Words such as “may,” “should,” “could,” “anticipate,” “believe,” “estimate,” “expect,” “objective,” “plan,” “project” and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual future events or results may differ materially from these statements. We disclaim any obligation to publicly update or revise any forward-looking statements as a result of new information, future events or any other reason.

The following is a list of factors, among others, that could cause actual results to differ materially from the forward-looking statements:

•potential increases in the costs of commodities and raw materials, or substantial decreases in their availability;

•heavy reliance on suppliers for components used in the manufacture and sale of our products, including a supply chain interruption due to material and cargo shortages as well as port congestion on the west coast of the United States and concerns about a potential labor strike by those west coast port union workers, the COVID-19 pandemic, political tensions, or other causes;

•the decrease in sales and/or increases in costs or reduced availability of commodities and components used in the production of our products due to recent and potential new sanctions and export controls targeting Russia in response to Russia's invasion of Ukraine;

•the extent to which the COVID-19 pandemic continues (including new variants of COVID-19 such as the Delta and Omicron variants) to impact our employees, operations, customers and suppliers;

•our ability to execute on restructuring actions and on the objectives related to the ASCEND transformation program in order to achieve anticipated incremental operating profit;

• the deterioration of, or instability in, the domestic and international economy and/or in our various end markets;

•decreased demand from customers in the oil & gas industry as a result of significant volatility in oil prices resulting from disruptions in the oil markets;

1

•uncertainty over global tariffs, or the financial impact of tariffs;

•failure to collect on accounts receivable, including in certain foreign jurisdictions where sales are concentrated to a limited number of distributors or agents;

•a significant failure in our information technology (IT) infrastructure, such as unauthorized access to financial and other sensitive data or cybersecurity threats;

•a material disruption at a significant manufacturing facility;

•competition in the markets we serve;

•currency exchange rate fluctuations, export and import restrictions, transportation disruptions or shortages, and other risks inherent in our international operations;

•failure to develop new products and the extent of market acceptance of new products;

•our ability to successfully identify, consummate and integrate acquisitions and realize anticipated benefits/results from acquired companies as part of our portfolio management process;

•the effects of divestitures and/or discontinued operations, including retained liabilities from, or indemnification obligations with respect to, businesses that we sell;

•if the operating performance of our businesses were to fall significantly below normalized levels, the potential for a non-cash impairment charge of goodwill and/or other intangible assets, as they represent a substantial amount of our total assets;

•regulatory and legal developments, including litigation, such as product liability and warranty claims;

•our ability to comply with the covenants in our debt agreements and fluctuations in interest rates;

•our ability to attract, develop, and retain qualified employees;

•inadequate intellectual property protection or infringement of the intellectual property of others; and

•other matters, including those of a political, economic, business, competitive and regulatory nature contained from time to time in our U.S. Securities and Exchange Commission ("SEC") filings, including, but not limited to, those factors listed in the "Risk Factors" section within Item 1A of Part I of our Form 10-K filed with the SEC on October 25, 2021.

When used herein, the terms “we,” “us,” “our” and the “Company” refer to Enerpac Tool Group Corp. and its subsidiaries. Reference to fiscal years, such as "fiscal 2022," are to the fiscal year ending on August 31 of the specified year. Enerpac Tool Group Corp. provides free-of-charge access to its Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments thereto, through its website, www.enerpactoolgroup.com, as soon as reasonably practicable after such reports are electronically filed with the SEC.

2

PART I—FINANCIAL INFORMATION

Item 1—Financial Statements

ENERPAC TOOL GROUP CORP.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended February 28,				Six Months Ended February 28,
	2022		2021		2022		2021
Net sales	$	136,599	$	120,654	$	267,502	$	240,084
Cost of products sold	76,618		65,878		147,895		130,044
Gross profit	59,981		54,776		119,607		110,040
Selling, general and administrative expenses	50,668		45,883		99,145		89,593
Amortization of intangible assets	1,881		2,136		3,886		4,272
Restructuring charges	1,832		649		4,569		859
Impairment & divestiture charges	1,116		401		1,116		539
Operating profit	4,484		5,707		10,891		14,777
Financing costs, net	755		1,338		1,716		3,055
Other expense, net	271		784		751		1,058
Earnings before income tax expense	3,458		3,585		8,424		10,664
Income tax expense	1,337		1		3,118		2,258
Net earnings from continuing operations	2,121		3,584		5,306		8,406
Loss from discontinued operations, net of income taxes	(900)		(402)		(1,297)		(626)
Net earnings	$	1,221	$	3,182	$	4,009	$	7,780
Earnings per share from continuing operations
Basic	$	0.04	$	0.06	$	0.09	$	0.14
Diluted	$	0.03	$	0.06	$	0.09	$	0.14
Loss per share from discontinued operations
Basic	$	(0.01)	$	(0.01)	$	(0.02)	$	(0.01)
Diluted	$	(0.01)	$	(0.01)	$	(0.02)	$	(0.01)
Earnings per share*
Basic	$	0.02	$	0.05	$	0.07	$	0.13
Diluted	$	0.02	$	0.05	$	0.07	$	0.13
Weighted average common shares outstanding
Basic	60,387		59,938		60,324		59,874
Diluted	60,689		60,269		60,655		60,180
*The total of Earnings per share from continuing operations and Loss per share from discontinued operations may not equal Earnings per share due to rounding.

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

ENERPAC TOOL GROUP CORP.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)

	Three Months Ended February 28,				Six Months Ended February 28,
	2022		2021		2022		2021
Net earnings	$	1,221	$	3,182	$	4,009	$	7,780
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments	1,519		9,034		(8,861)		10,434
Pension, other postretirement benefit plans, and cash flow hedges	225		123		561		352
Total other comprehensive income (loss), net of tax	1,744		9,157		(8,300)		10,786
Comprehensive income (loss)	$	2,965	$	12,339	$	(4,291)	$	18,566

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

ENERPAC TOOL GROUP CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(Unaudited)

	February 28, 2022		August 31, 2021
ASSETS
Current assets
Cash and cash equivalents	$	133,430	$	140,352
Accounts receivable, net	113,460		103,233
Inventories, net	89,479		75,347
Other current assets	37,694		38,503
Total current assets	374,063		357,435
Property, plant and equipment, net	46,480		48,590
Goodwill	273,437		277,593
Other intangible assets, net	48,608		54,545
Other long-term assets	78,874		82,084
Total assets	$	821,462	$	820,247
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Trade accounts payable	$	66,422	$	61,958
Accrued compensation and benefits	20,852		21,597
Income taxes payable	6,270		5,674
Other current liabilities	46,772		45,535
Total current liabilities	140,316		134,764
Long-term debt, net	175,000		175,000
Deferred income taxes	5,540		4,397
Pension and postretirement benefit liabilities	16,805		17,783
Other long-term liabilities	70,778		76,105
Total liabilities	408,439		408,049
Commitments and contingencies (Note 13)
Shareholders’ equity
Class A common stock, $0.20 par value per share, authorized 168,000,000 shares, issued 83,344,526 and 83,021,654 shares, respectively	16,669		16,604
Additional paid-in capital	208,022		202,971
Treasury stock, at cost, 22,799,230 shares	(667,732)		(667,732)
Retained earnings	957,348		953,339
Accumulated other comprehensive loss	(101,284)		(92,984)
Stock held in trust	(3,089)		(3,067)
Deferred compensation liability	3,089		3,067
Total shareholders' equity	413,023		412,198
Total liabilities and shareholders’ equity	$	821,462	$	820,247

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

ENERPAC TOOL GROUP CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six Months Ended February 28,
	2022		2021
Operating Activities
Net earnings	$	4,009	$	7,780
Less: Net loss from discontinued operations	(1,297)		(626)
Net earnings from continuing operations	5,306		8,406
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities - continuing operations:
Impairment & divestiture charges	1,116		482
Depreciation and amortization	10,162		10,966
Stock-based compensation expense	8,289		5,228
Provision for (benefit from) deferred income taxes	418		(398)
Amortization of debt issuance costs	240		240
Other non-cash (benefits) charges	(254)		514
Changes in components of working capital and other:
Accounts receivable	(11,889)		(9,920)
Inventories	(15,787)		(1,505)
Trade accounts payable	4,072		4,114
Prepaid expenses and other assets	1,478		(7,047)
Income tax accounts	2,430		692
Accrued compensation and benefits	(520)		3,785
Other accrued liabilities	180		(2,057)
Cash provided by operating activities - continuing operations	5,241		13,500
Cash used in operating activities - discontinued operations	(564)		(254)
Cash provided by operating activities	4,677		13,246
Investing Activities
Capital expenditures	(4,830)		(5,630)
Proceeds from sale of property, plant and equipment	163		595
Cash used in investing activities - continuing operations	(4,667)		(5,035)
Cash used in investing activities	(4,667)		(5,035)
Financing Activities
Borrowings on revolving credit facility	15,000		10,000
Principal repayments on revolving credit facility	(15,000)		(55,000)
Taxes paid related to the net share settlement of equity awards	(3,375)		(1,981)
Stock option exercises & other	152		182
Payment of cash dividend	(2,409)		(2,394)
Cash used in financing activities - continuing operations	(5,632)		(49,193)
Cash provided by financing activities - discontinued operations	—		750
Cash used in financing activities	(5,632)		(48,443)
Effect of exchange rate changes on cash	(1,300)		3,316
Net decrease in cash and cash equivalents	(6,922)		(36,916)
Cash and cash equivalents - beginning of period	140,352		152,170
Cash and cash equivalents - end of period	$	133,430	$	115,254

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Basis of Presentation

General

Enerpac Tool Group Corp. ("Company") is a premier industrial tools and services company serving a broad and diverse set of customers in more than 100 countries. The Company has one reportable segment, Industrial Tools & Service ("IT&S"), and an Other operating segment, which does not meet the criteria to be considered a reportable segment.

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles ("GAAP") for interim financial reporting and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The condensed consolidated balance sheet data as of August 31, 2021 was derived from the Company’s audited financial statements but does not include all disclosures required by GAAP. For additional information, including the Company’s significant accounting policies, refer to the consolidated financial statements and related footnotes in the Company’s fiscal 2021 Annual Report on Form 10-K.

In the opinion of management, all adjustments considered necessary for a fair statement of financial results have been made. Such adjustments consist of only those of a normal recurring nature. Operating results for the three and six months ended February 28, 2022 are not necessarily indicative of the results that may be expected for the entire fiscal year ending August 31, 2022. The COVID-19 pandemic has negatively impacted, and is likely to continue to negatively impact to varying extents, the global economy. The Company's operating results and financial position will continue to be subject to the general economic conditions created by the pandemic, including the current supply chain and logistics environment caused by the sharp increase in demand as global economies recover. The Company also has historically sold products to companies located in or associated with Russia. In response to Russia's invasion of Ukraine, countries that are members of the North Atlantic Treaty Organization ("NATO"), including the United States, have initiated sanctions and export controls targeting Russia and entities associated with Russia which significantly limits our ability to serve certain customers and collect on our outstanding receivables. The duration and extent to which the pandemic and trade sanctions against Russia effect the Company's business will depend on future developments which still remain uncertain.

Recently Adopted Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board ("FASB") issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this update simplify the accounting for income taxes by removing certain exceptions and amending and clarifying existing guidance. The Company adopted this guidance on September 1, 2021. The adoption did not have a material effect on our consolidated financial statements.

Recently Issued Accounting Pronouncements

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which amends ASC 805 to require an acquirer to, at the date of acquisition, recognize and measure contract assets and contract liabilities acquired in accordance with ASU 2014-9, Revenue from Contracts with Customers (Topic 606) as if the entity had originated the contracts. The guidance is effective for fiscal years beginning after December 15, 2022. The Company will adopt this guidance in the event of a business combination subsequent to the effective date of the guidance.

In March 2020, the FASB issued ASU 2020-4, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for a limited time to ease the potential burden of accounting for reference rate reform on financial reporting. This guidance applies to contracts, hedging relationships and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates. The guidance is effective beginning on March 12, 2020 through December 31, 2022. In January 2021, the FASB issued ASU 2021-01 allowing entities to apply certain aspects of ASC 848 (previously ASU 2020-4) to all derivative instruments that undergo a modification of the interest rate used for discounting, margining or contract price alignment as a result of the reference reform. The guidance is also effective through December 31, 2022. The Company has not utilized any of the optional expedients or exceptions available under this guidance. The Company will continue to assess whether this guidance is applicable throughout the effective period.

7

Accumulated Other Comprehensive Loss

The following is a summary of the Company's accumulated other comprehensive loss (in thousands):

	February 28, 2022		August 31, 2021
Foreign currency translation adjustments	$	78,847	$	69,986
Pension and other postretirement benefit plans, net of tax	22,437		22,998
Accumulated other comprehensive loss	$	101,284	$	92,984

Property Plant and Equipment

The following is a summary of the Company's components of property, plant and equipment (in thousands):

	February 28, 2022		August 31, 2021
Land, buildings and improvements	$	16,409	$	16,617
Machinery and equipment	145,812		145,541
Gross property, plant and equipment	162,221		162,158
Less: Accumulated depreciation	(115,741)		(113,568)
Property, plant and equipment, net	$	46,480	$	48,590

Note 2. Revenue from Contracts with Customers

Nature of Goods and Services

The Company generates its revenue under two principal activities, which are discussed below:

Product Sales: Sales of tools, heavy-lifting solutions, and rope and cable solutions are recorded when control is transferred to the customer (i.e., performance obligation has been satisfied). For the majority of the Company’s product sales, revenue is recognized at a point in time when control of the product is transferred to the customer, which generally occurs when the product is shipped from the Company to the customer. For certain other products that are highly customized and have a limited alternative use, and for which the Company has an enforceable right of reimbursement for performance completed to date, revenue is recognized over time. We consider the input measure (efforts-expended or cost-to-cost) or output measure as a fair measure of progress for the recognition of over-time revenue associated with these custom products. For a majority of the Company’s custom products, machine hours and labor hours (efforts-expended measurement) are used as a measure of progress.

Service & Rental Sales: Service contracts consist of providing highly trained technicians to perform bolting, technical services, machining and joint-integrity work for our customers. These revenues are recognized over time as our customers simultaneously receive and consume the benefits provided by the Company. We consider the input measure (efforts-expended or cost-to-cost) or output measure as a fair measure of progress for the recognition of over-time revenue associated with service contracts. For a majority of the Company’s service contracts, labor hours (efforts-expended measurement) is used as the measure of progress when it is determined to be a better depiction of the transfer of control to the customer due to the timing and pattern of labor hours incurred. Revenue from rental contracts (less than a year and non-customized products) is generally recognized ratably over the contract term, depicting the customer’s consumption of the benefit related to the rental equipment.

Disaggregated Revenue and Performance Obligations

The Company disaggregates revenue from contracts with customers by reportable segment and product line and by the timing of when goods and services are transferred. See Note 12, "Segment Information" for information regarding our revenue disaggregation by reportable segment and product line.

The following table presents information regarding revenues disaggregated by the timing of when goods and services are transferred (in thousands):

	Three Months Ended February 28,				Six Months Ended February 28,
	2022		2021		2022		2021
Revenues recognized at point in time	$	104,919	$	90,726	$	205,092	$	177,506
Revenues recognized over time	31,680		29,928		62,410		62,578
Total	$	136,599	$	120,654	$	267,502	$	240,084

8

Contract Balances

The Company's contract assets and liabilities are as follows (in thousands):

	February 28, 2022		August 31, 2021
Receivables, which are included in accounts receivable, net	$	113,460	$	103,233
Contract assets, which are included in other current assets	2,965		8,551
Contract liabilities, which are included in other current liabilities	3,653		3,410

Receivables: The Company performs its obligations under a contract with a customer by transferring goods or services in exchange for consideration from the customer. The Company typically invoices its customers as soon as control of an asset is transferred and a receivable for the Company is established. Accounts receivable, net is recorded at face amount of customer receivables less an allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts for expected losses as a result of customers’ inability to make required payments. Management evaluates the aging of customer receivable balances, the financial condition of its customers, historical trends and the time outstanding of specific balances to estimate the amount of receivables that may not be collected in the future and records the appropriate provision. The allowance for doubtful accounts was $7.4 million and $4.2 million at February 28, 2022 and August 31, 2021, respectively. As indicated in the "Concentration of Credit Risk" section below, the Company continues to negotiate terms to secure payment with an agent whose continued payment delinquency has created a concentration of credit risk. The Company recorded through bad debt expense (included in "Selling, general and administrative expenses" in the Condensed Consolidated Statements of Operations) an additional reserve of $2.4 million in the three months ended February 28, 2022 based on the updated consideration of the factors listed below. The allowance for doubtful accounts for this particular agent as of February 28, 2022 represents management's best estimate of the amount probable of collection and considers various factors with respect to this matter, including, but not limited to, (i) the lack of payment by the agent in the nine-month period ended February 28, 2022, (ii) our due diligence on balances due to the agent from its end customers related to sales of our services and products and the known markup on those sales from the agent to end customer, (iii) the status of ongoing negotiations with the agent to secure payments and (iv) legal recourse available to secure payment. Actual collections from the agent may differ from the Company's estimate.

Contract Assets: Contract assets relate to the Company’s rights to consideration for work completed but not billed as of the reporting date on contracts with customers. The contract assets are transferred to receivables when the rights become unconditional. The Company has contract assets on contracts that are generally long-term and have revenues that are recognized over time.

Contract Liabilities: As of February 28, 2022, the Company had certain contracts where there were unsatisfied performance obligations and the Company had received cash consideration from customers before the performance obligations were satisfied. The majority of these contracts relate to longer term customer contracts (project durations of greater than three months) and are recognized over time. The Company estimates that the $3.7 million will be recognized in net sales from satisfying those performance obligations within the next twelve months, with an immaterial amount recognized in periods after.

Concentration of Credit Risk: The Company sells products and services through distributors and agents. In certain jurisdictions, those third parties represent a significant portion of our sales in their respective country which can pose a concentration of credit risk if these larger distributors or agents are not timely in their payments. As of February 28, 2022, the Company was exposed to a concentration of credit risk as a result of the continued payment delinquency of one of our agents with whom we continue to negotiate a plan to secure payments. This agent's accounts receivable, prior to consideration of the allowance for doubtful accounts, represent 10.2% of the Company's outstanding accounts receivable.

Timing of Performance Obligations Satisfied at a Point in Time: The Company evaluates when the customer obtains control of the product based on shipping terms, as control will transfer, depending upon such terms, at different points between the Company's manufacturing facility or warehouse and the customer’s location. The Company considers control to have transferred upon shipment or delivery because (i) the Company has a present right to payment at that time; (ii) the legal title has been transferred to the customer; (iii) the Company has transferred physical possession of the product to the customer; and (iv) the customer has significant risks and rewards of ownership of the product.

Variable Consideration: The Company estimates whether it will be subject to variable consideration under the terms of the contract and includes its estimate of variable consideration in the transaction price based on the expected value method when it is deemed probable of being realized based on historical experience and trends. Types of variable consideration may include rebates, incentives and discounts, among others, which are recorded as a reduction to net sales at the time when control of a performance obligation is transferred to the customer.

Practical Expedients & Exemptions: The Company elected to expense the incremental cost to obtaining a contract when the amortization period for such contracts would be one year or less. The Company does not disclose the value of unperformed obligations for (i) contracts with an original expected length of one year or less and    (ii) contracts for which it recognizes revenue at the amount to which it has the right to invoice for services performed.

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Note 3. Restructuring Charges

The Company has undertaken or committed to various restructuring initiatives, including workforce reductions, leadership changes, plant consolidations to reduce manufacturing overhead, satellite office closures, the continued movement of production and product sourcing to low-cost alternatives and the centralization and standardization of certain administrative functions. Liabilities for severance are generally to be paid within twelve months, while future lease payments related to facilities vacated as a result of restructuring are to be paid over the underlying remaining lease terms. During fiscal 2019, the Company announced a restructuring plan focused on (i) the integration of the Enerpac and Hydratight businesses (IT&S segment), (ii) the strategic exit of certain commodity-type services in our North America Services operations (IT&S segment) and (iii) driving efficiencies within the overall corporate structure. In the third quarter of fiscal 2020, the Company announced the expansion and revision of this plan, which further simplified and flattened the corporate structure through elimination of redundancies between the segment and corporate functions, while enhancing our commercial and marketing processes to become even closer to our customers. Upon assessment of the the Company's operating structure by the Company's new President & Chief Executive Officer (hired effective October 2021), the Company recorded $1.9 million and $4.6 million of charges in the three and six months ended February 28, 2022 in order to further simplify and streamline the organizational structure. Restructuring charges associated with expansion of the fiscal 2019 plan were $0.6 million and $0.7 million in the three and six months ended February 28, 2021.

The following summarizes restructuring reserve activity (which for the six months ended February 28, 2022 excludes $0.8 million and $0.5 million of charges for IT&S and Corporate, respectively, and for the six months ended February 28, 2021 excludes less than $0.1 million of charges for IT&S, associated with the accelerated vesting of equity awards which has no impact on the restructuring reserve) for the IT&S segment and Corporate (in thousands):

	Six Months Ended February 28, 2022
	IT&S		Corporate
Balance as of August 31, 2021	$	1,737	$	26
Restructuring charges	2,271		1,000
Cash payments	(2,555)		(995)
Impact of changes in foreign currency rates	(37)		—
Balance as of February 28, 2022	$	1,416	$	31

	Six Months Ended February 28, 2021
	IT&S		Corporate
Balance as of August 31, 2020	$	1,443	$	267
Restructuring charges	674		9
Cash payments	(1,107)		(250)
Impact of changes in foreign currency rates	15		—
Balance as of February 28, 2021	$	1,025	$	26

Total restructuring charges (inclusive of the Other segment) were $1.8 million and $4.6 million in the three and six months ended February 28, 2022, respectively, and $0.6 million and $0.9 million in the three and six months ended February 28, 2021, respectively, being reported in "Restructuring charges."

There were no restructuring charges related to Cortland U.S. (Other segment) in three and six months ended February 28, 2022. Restructuring expenses for Cortland U.S. were less than $0.1 million and $0.2 million in the three and six months ended February 28, 2021, respectively. Restructuring reserves for Cortland U.S. were $0.1 million as of February 28, 2022 and August 31, 2021, respectively.

Note 4. Discontinued Operations

On October 31, 2019, as part of our overall strategy to become a pure-play industrial tools and services company, the Company completed the sale of the businesses comprising its former Engineered Components & Systems ("EC&S") segment. This divestiture was considered part of our strategic shift to become a pure-play industrial tools and services company, and therefore, the results of operations are recorded as a component of "Loss from discontinued operations, net of income taxes" in the Condensed Consolidated Statements of Operations for all periods presented. A component of the purchase price was payable in four quarterly installments of which the final $0.7 million was received in the six months ended February 28, 2021 (this final payment was received greater than one year from the divestiture date and, as such, is reflected in "Cash provided by financing activities - discontinued operations" within the Condensed Consolidated Statements of Cash Flows). All other discontinued operations activity included within the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Cash Flows for the periods presented relate to impacts from certain retained liabilities.

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The following represents the detail of "Loss from discontinued operations, net of income taxes" within the Condensed Consolidated Statements of Operations (in thousands) :

	Three Months Ended February 28,				Six Months Ended February 28,
	2022		2021		2022		2021
Selling, general and administrative expenses	$	1,157	$	559	$	1,661	$	854
Operating loss	(1,157)		(559)		(1,661)		(854)
Other loss, net	—		—		—		—
Loss before income tax benefit	(1,157)		(559)		(1,661)		(854)
Income tax benefit	(257)		(157)		(364)		(228)
Loss from discontinued operations, net of income taxes	$	(900)	$	(402)	$	(1,297)	$	(626)

Note 5. Goodwill, Intangible Assets and Long-Lived Assets

Changes in the gross carrying value of goodwill and intangible assets result from changes in foreign currency exchange rates, business acquisitions, divestitures and impairment charges. The changes in the carrying amount of goodwill for the six months ended February 28, 2022 are as follows (in thousands):

	IT&S		Other		Total
Balance as of August 31, 2021	$	265,087	$	12,506	$	277,593
Impact of changes in foreign currency rates	(4,156)		—		(4,156)
Balance as of February 28, 2022	$	260,931	$	12,506	$	273,437

The gross carrying value and accumulated amortization of the Company’s intangible assets are as follows (in thousands):

		February 28, 2022						August 31, 2021
	Weighted Average Amortization Period (Years)	Gross Carrying Value		Accumulated Amortization		Net Book Value		Gross Carrying Value		Accumulated Amortization		Net Book Value
Amortizable intangible assets:
Customer relationships	14	$	140,661	$	117,743	$	22,918	$	142,453	$	114,463	$	27,990
Patents	11	14,289		13,553		736		14,492		13,688		804
Trademarks and tradenames	12	3,263		2,408		855		3,307		2,391		916
Indefinite lived intangible assets:
Tradenames	N/A	24,099		—		24,099		24,835		—		24,835
		$	182,312	$	133,704	$	48,608	$	185,087	$	130,542	$	54,545

The Company estimates that amortization expense will be $3.4 million for the remaining six months of fiscal 2022. Amortization expense for future years is estimated to be: $5.5 million in fiscal 2023, $3.9 million in fiscal 2024, $3.3 million in fiscal 2025, $2.0 million in fiscal 2026, $1.9 million in fiscal 2027 and $4.5 million cumulatively thereafter. The future amortization expense amounts represent estimates and may be impacted by future acquisitions, divestitures, or changes in foreign currency exchange rates, among other causes.

In the three months ended February 28, 2022, the Company recorded "Impairment & divestiture charges" of $1.1 million; $0.8 million related to a customer relationship intangible asset whereby the Company no longer intends to operate in the country associated with said customers and $0.3 million associated with an indefinite lived tradename intangible asset on a secondary brand whereby the Company plans to sunset its use over the remainder of the fiscal year.

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Note 6. Product Warranty Costs

The Company generally offers its customers an assurance warranty on products sold, although warranty periods may vary by product type and application. The reserve for future warranty claims, which is recorded within the "Other current liabilities" line in the Condensed Consolidated Balance Sheets, is based on historical claim rates and current warranty cost experience. The following summarizes the changes in product warranty reserves for the six months ended February 28, 2022 and 2021, respectively (in thousands):

	Six Months Ended February 28,
	2022		2021
Beginning balance	$	1,300	$	892
Provision for warranties	627		704
Warranty payments and costs incurred	(296)		(609)
Impact of changes in foreign currency rates	(33)		18
Ending balance	$	1,598	$	1,005

Note 7. Debt

The following is a summary of the Company’s long-term indebtedness (in thousands):

	February 28, 2022		August 31, 2021
Senior Credit Facility
Revolver	$	175,000	$	175,000
Total long-term debt, less current maturities	$	175,000	$	175,000

Senior Credit Facility

In March 2019, the Company entered into a senior credit facility (the “Senior Credit Facility”) with a syndicate of banks, to among other things, (i) expand the multi-currency revolving line of credit from $300 million to $400 million, (ii) extend the maturity of the Company's Senior Credit Facility from May 2020 to March 2024 (no required principal payments prior to maturity) and (iii) modify certain other provisions of the credit agreement including a reduction in pricing. The Senior Credit Facility was initially comprised of a $400 million revolving line of credit and a $200 million term loan.

At February 28, 2022, there was $175.0 million of borrowings under the revolving line of credit and $219.4 million of available borrowing capacity under the revolving line of credit after reduction for $5.6 million of outstanding letters of credit issued under the Senior Credit Facility.

The Senior Credit Facility also provides the option for future expansion, subject to certain conditions, through a $300 million accordion and/or a $200 million incremental term loan. Borrowings under the Senior Credit Facility bear interest at a variable rate based on LIBOR or a base rate, ranging from 1.125% to 2.00% in the case of loans bearing interest at LIBOR and from 0.125% to 1.00% in the case of loans bearing interest at the base rate. In addition, a non-use fee is payable quarterly on the average unused amount of the revolving line of credit ranging from 0.15% to 0.3% per annum, based on the Company's net leverage.

The Senior Credit Facility contains two financial covenants, which are a maximum leverage ratio of 3.75:1 and a minimum interest coverage ratio of 3.5:1. Certain transactions lead to adjustments to the underlying ratios, including an increase to the leverage ratio from 3.75 to 4.25 during the four fiscal quarters after a significant acquisition.

The Company was in compliance with all financial covenants at February 28, 2022. Borrowings under the Senior Credit Facility are secured by substantially all personal property assets of the Company and its domestic subsidiary guarantors and certain equity interests owned by the foreign law pledgors.

Note 8. Fair Value Measurements

The Company assesses the inputs used to measure the fair value of financial assets and liabilities using a three-tier hierarchy. Level 1 inputs include unadjusted quoted prices for identical instruments and are the most observable. Level 2 inputs include quoted prices for similar assets and observable inputs such as interest rates, foreign currency exchange rates, commodity rates and yield curves. Level 3 inputs are not observable in the market and include management’s own judgments about the assumptions market participants would use in pricing an asset or liability.

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The fair value of the Company’s cash and cash equivalents, accounts receivable, accounts payable and variable rate long-term debt approximated book value at both February 28, 2022 and August 31, 2021 due to their short-term nature and/or the fact that the interest rates approximated market rates. Foreign currency exchange contracts and interest rate swaps are recorded at fair value. The fair value of the Company's foreign currency exchange contracts was a net liability of less than $0.1 million at both February 28, 2022 and August 31, 2021. The fair value of the foreign currency exchange and interest rate swap contracts were based on quoted inactive market prices and therefore classified as Level 2 within the valuation hierarchy.

As discussed in Note 5, “Goodwill, Intangible Assets and Long-Lived Assets”, the Company recorded impairments to a customer relationship intangible asset and an indefinite lived tradename intangible asset in the three months ended February 28, 2022. The fair value of the customer relationship and tradename impaired were determined utilizing generally accepted valuation techniques, specifically, forecasting future revenues and/or using a market royalty rate. These valuations represent Level 3 assets measured at fair value on a nonrecurring basis.

Note 9. Derivatives

All derivatives are recognized in the balance sheet at their estimated fair value. The Company does not enter into derivatives for speculative purposes. Changes in the fair value of derivatives (not designated as hedges) are recorded in earnings along with the gain or loss on the hedged asset or liability.

The Company is exposed to market risk for changes in foreign currency exchange rates due to the global nature of its operations. In order to manage this risk, the Company utilizes foreign currency exchange contracts to reduce the exchange rate risk associated with recognized non-functional currency balances. The effects of changes in exchange rates are reflected concurrently in earnings for both the fair value of the foreign currency exchange contracts and the related non-functional currency asset or liability. These derivative gains and losses offset foreign currency gains and losses from the related revaluation of non-functional currency assets and liabilities (amounts included in "Other (income) expense" in the Condensed Consolidated Statements of Operations). The U.S. dollar equivalent notional value of these short duration foreign currency exchange contracts was $19.6 million and $16.0 million at February 28, 2022 and August 31, 2021, respectively. The fair value of outstanding foreign currency exchange contracts was a net liability of less than $0.1 million at both February 28, 2022 and August 31, 2021. Net foreign currency gain (loss) (included in "Other (income) expense" in the Condensed Consolidated Statements of Operations) related to these derivative instruments were as follows (in thousands):

	Three Months Ended February 28,				Six Months Ended February 28,
	2022		2021		2022		2021
Foreign currency gain (loss), net	$	54	$	109	$	(128)	$	61

The Company was a fixed-rate payor on an interest rate swap contract that fixed the LIBOR-based index used to determine the interest rates charged on a total of $100.0 million of the Company's LIBOR-based variable rate borrowings on the revolving line of credit. The contract carried a fixed rate of 0.259% and expired in August 2021. The swap agreement qualified as a hedging instrument and was designated as a cash flow hedge of forecasted LIBOR-based interest payments. The change in the fair value of the interest rate swap, a gain of less than $0.1 million in both the three and six months ended February 28, 2021 was recorded in other comprehensive income (loss).

Note 10. Earnings per Share and Shareholders' Equity

The Company's Board of Directors has authorized the repurchase of shares of the Company's common stock under publicly announced share repurchase programs. Since the inception of the initial share repurchase program in fiscal 2012, the Company has repurchased 22,799,230 shares of common stock for $667.7 million. As of February 28, 2022, the maximum number of shares that may yet be purchased under the programs is 5,200,770 shares. The Company suspended the share repurchase program in response to the COVID-19 pandemic in the third quarter of fiscal 2020 and, accordingly, did not repurchase shares in either of the six months ended February 28, 2022 or 2021. As the Company again considers strategic share repurchases, the Company's Board of Directors, in March 2022, rescinded its prior share repurchase authorization and authorized the repurchase of a total of 10,000,000 shares.

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The reconciliation between basic and diluted earnings per share is as follows (in thousands, except per share amounts):

	Three Months Ended February 28,				Six Months Ended February 28,
	2022		2021		2022		2021
Numerator:
Net earnings from continuing operations	$	2,121	$	3,584	$	5,306	$	8,406
Net loss from discontinued operations	(900)		(402)		(1,297)		(626)
Net earnings	$	1,221	$	3,182	4,009		7,780
Denominator:
Weighted average common shares outstanding - basic	60,387		59,938		60,324		59,874
Net effect of dilutive securities - stock based compensation plans	302		331		331		306
Weighted average common shares outstanding - diluted	60,689		60,269		60,655		60,180
Earnings per common share from continuing operations:
Basic	$	0.04	$	0.06	$	0.09	$	0.14
Diluted	$	0.03	$	0.06	$	0.09	$	0.14
Loss per common share from discontinued operations:
Basic	$	(0.01)	$	(0.01)	$	(0.02)	$	(0.01)
Diluted	$	(0.01)	$	(0.01)	$	(0.02)	$	(0.01)
Earnings per common share:*
Basic	$	0.02	$	0.05	$	0.07	$	0.13
Diluted	$	0.02	$	0.05	$	0.07	$	0.13
Anti-dilutive securities from stock based compensation plans (excluded from earnings per share calculation)	1,037		932		941		1,211
*The total of Earnings per share from continuing operations and Loss per share from discontinued operations may not equal Earnings per share due to rounding.

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The following table illustrates the changes in the balances of each component of shareholders' equity for the three months ended February 28, 2022 (in thousands):

	Common Stock			Additional Paid-in Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Stock Held in Trust		Deferred Compensation Liability		Total Shareholders’ Equity
	Issued Shares	Amount
Balance at November 31, 2021	83,092	$	16,622	$	207,817	$	(667,732)	$	956,127	$	(103,028)	$	(3,092)	$	3,092	$	409,806
Net earnings	—	—		—		—		1,221		—		—		—		1,221
Other comprehensive income, net of tax	—	—		—		—		—		1,744		—		—		1,744
Stock contribution to employee benefit plans and other	5	1		64		—		—		—		—		—		65
Vesting of equity awards	247	46		(46)		—		—		—		—		—		—
Stock based compensation expense	—	—		2,142		—		—		—		—		—		2,142
Stock option exercises	—	—		—		—		—		—		—		—		—
Tax effect related to net share settlement of equity awards	—	—		(1,980)		—		—		—		—		—		(1,980)
Stock issued to, acquired for and distributed from rabbi trust	1	—		25		—		—		—		3		(3)		25
Balance at February 28, 2022	83,345	$	16,669	$	208,022	$	(667,732)	$	957,348	$	(101,284)	$	(3,089)	$	3,089	$	413,023

The following table illustrates the changes in the balances of each component of shareholders' equity for the three months ended February 28, 2021 (in thousands):

	Common Stock			Additional Paid-in Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Stock Held in Trust		Deferred Compensation Liability		Total Shareholders’ Equity
	Issued Shares	Amount
Balance at November 30, 2020	82,625	$	16,525	$	195,979	$	(667,732)	$	922,269	$	(99,095)	$	(2,643)	$	2,643	$	367,946
Net earnings	—	—		—		—		3,182		—		—		—		3,182
Other comprehensive income, net of tax	—	—		—		—		—		9,157		—		—		9,157
Stock contribution to employee benefit plans and other	4	1		80		—		—		—		—		—		81
Vesting of equity awards	235	47		(47)		—		—		—		—		—		—
Stock based compensation expense	—	—		2,647		—		—		—		—		—		2,647
Tax effect related to net share settlement of equity awards	—	—		(1,706)		—		—		—		—		—		(1,706)
Stock issued to, acquired for and distributed from rabbi trust	15	3		83		—		—		—		(353)		353		86
Balance at February 28, 2021	82,879	$	16,576	$	197,036	$	(667,732)	$	925,451	$	(89,938)	$	(2,996)	$	2,996	$	381,393

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The following table illustrates the changes in the balances of each component of shareholders' equity for the six months ended February 28, 2022 (in thousands):

	Common Stock			Additional Paid-in Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Stock Held in Trust		Deferred Compensation Liability		Total Shareholders’ Equity
	Issued Shares	Amount
Balance at August 31, 2021	83,022	$	16,604	$	202,971	$	(667,732)	$	953,339	$	(92,984)	$	(3,067)	$	3,067	$	412,198
Net earnings	—	—		—		—		4,009		—		—		—		4,009
Other comprehensive loss, net of tax	—	—		—		—		—		(8,300)		—		—		(8,300)
Stock contribution to employee benefit plans and other	7	2		148		—		—		—		—		—		150
Vesting of equity awards	314	63		(63)		—		—		—		—		—		—
Stock based compensation expense	—	—		8,289		—		—		—		—		—		8,289
Tax effect related to net share settlement of equity awards	—	—		(3,373)		—		—		—		—		—		(3,373)
Stock issued to, acquired for and distributed from rabbi trust	2	—		50		—		—		—		(22)		22		50
Balance at February 28, 2022	83,345	$	16,669	$	208,022	$	(667,732)	$	957,348	$	(101,284)	$	(3,089)	$	3,089	$	413,023

The following table illustrates the changes in the balances of each component of shareholders' equity for the six months ended February 28, 2021 (in thousands):

	Common Stock			Additional Paid-in Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Stock Held in Trust		Deferred Compensation Liability		Total Shareholders’ Equity
	Issued Shares	Amount
Balance at August 31, 2020	82,594	$	16,519	$	193,492	$	(667,732)	$	917,671	$	(100,724)	$	(2,562)	$	2,562	$	359,226
Net earnings	—	—		—		—		7,780		—		—		—		7,780
Other comprehensive income, net of tax	—	—		—		—		—		10,786		—		—		10,786
Stock contribution to employee benefit plans and other	10	2		180		—		—		—		—		—		182
Vesting of equity awards	255	51		(51)		—		—		—		—		—		—
Stock based compensation expense	—	—		5,227		—		—		—		—		—		5,227
Tax effect related to net share settlement of equity awards	—	—		(1,981)		—		—		—		—		—		(1,981)
Stock issued to, acquired for and distributed from rabbi trust	20	4		169		—		—		—		(434)		434		173
Balance at February 28, 2021	82,879	$	16,576	$	197,036	$	(667,732)	$	925,451	$	(89,938)	$	(2,996)	$	2,996	$	381,393

Note 11. Income Taxes

The Company's global operations, acquisition activity (as applicable) and specific tax attributes provide opportunities for continuous global tax planning initiatives to maximize tax credits and deductions. Comparative earnings before income taxes, income tax expense and effective income tax rates from continuing operations are as follows (dollars in thousands):

	Three Months Ended February 28,						Six Months Ended February 28,
	2022			2021			2022			2021
Earnings from continuing operations before income tax expense	$	3,458		$	3,585		$	8,424		$	10,664
Income tax expense	1,337			1			3,118			2,258
Effective income tax rate	38.7		%	0.0		%	37.0		%	21.2		%

The Company’s earnings from continuing operations before income taxes include earnings from both U.S. and foreign jurisdictions. Though most foreign tax rates are now in line with the U.S. tax rate of 21%, the annual effective tax rate is impacted by withholding taxes, losses in jurisdictions where no benefit can be realized, and various aspects of the U.S. Tax Cuts and Jobs Act, such as the Global Intangible Low-Taxed Income, Foreign-Derived Intangible Income and Base Erosion and Anti-Abuse Tax provisions.

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The effective tax rate for the three months ended February 28, 2022 was 38.7%, compared to 0.0% for the comparable prior-year period. Overall, both time periods are significantly impacted by year-to-date losses and deductions in jurisdictions where no tax benefit can be realized. The lower effective tax rate for the three months ended February 28, 2021 was primarily driven by tax benefits related to stock compensation and tax planning initiatives that did not recur in the current year. Additionally, both the current and prior-year effective income tax rates include the impact of non-recurring items.

Note 12. Segment Information

The Company is a global manufacturer of a broad range of industrial products and solutions. The IT&S reportable segment is primarily engaged in the design, manufacture and distribution of branded hydraulic and mechanical tools and in providing services and tool rental to the industrial, maintenance, infrastructure, oil & gas, alternative energy and other markets. The Other operating segment is included for purposes of reconciliation of the respective balances below to the condensed consolidated financial statements.

The following tables summarize financial information by reportable segment and product line (in thousands):    

	Three Months Ended February 28,				Six Months Ended February 28,
	2022		2021		2022		2021
Net Sales by Reportable Segment & Product Line
IT&S Segment
Product	$	97,498	$	87,195	$	189,847	$	169,768
Service & Rental	28,442		25,544		57,406		55,146
	125,940		112,739		247,253		224,914
Other Operating Segment	10,659		7,915		20,249		15,170
	$	136,599	$	120,654	$	267,502	$	240,084
Operating Profit (Loss)
IT&S Segment	$	12,582	$	13,857	$	30,646	$	31,014
Other Operating Segment	334		(1,873)		(923)		(3,682)
General Corporate	(8,432)		(6,277)		(18,832)		(12,555)
	$	4,484	$	5,707	$	10,891	$	14,777

	February 28, 2022		August 31, 2021
Assets
IT&S Segment	$	656,199	$	641,256
Other Operating Segment	52,965		52,745
General Corporate	112,298		126,246
	$	821,462	$	820,247

In addition to the impact of changes in foreign currency exchange rates, the comparability of segment and product line information is impacted by acquisition/divestiture activities, impairment & divestiture charges, restructuring costs and related benefits. Corporate assets, which are not allocated, principally represent cash and cash equivalents, property, plant and equipment, Right of Use ("ROU") assets, capitalized debt issuance costs and deferred income taxes.

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Note 13. Commitments and Contingencies

The Company had outstanding letters of credit of $9.3 million and $11.9 million at February 28, 2022 and August 31, 2021, respectively, the majority of which relate to commercial contracts and self-insured workers' compensation programs.

As part of the Company's global sourcing strategy, we have entered into agreements with certain suppliers that require the supplier to maintain minimum levels of inventory to support certain products for which we require a short lead time to fulfill customer orders. We have the ability to notify the supplier that they no longer need maintain the minimum level of inventory should we discontinue manufacturing of a product during the contract period; however, we must purchase the remaining minimum inventory levels the supplier was required to maintain within a defined period of time.

The Company is a party to various legal proceedings that have arisen in the normal course of business. These legal proceedings include regulatory matters, product liability, breaches of contract, employment, personal injury and other disputes. The Company has recorded reserves for loss contingencies based on the specific circumstances of each case. Such reserves are recorded when it is probable a loss has been incurred and can be reasonably estimated. The Company maintains a policy to exclude from such reserves an estimate of legal defense costs. In the opinion of management, resolution of these contingencies is not expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.

The Company remains contingently liable for lease payments under leases of businesses that it previously divested or spun-off in the event that such businesses are unable to fulfill their future lease payment obligations; however, the Company does not believe it is probable that it will be required to satisfy these obligations. Future minimum lease payments for these leases at February 28, 2022 were $4.5 million associated with monthly payments extending to fiscal 2025.

Additionally, in fiscal 2019, the Company provided voluntary self-disclosures to both Dutch and U.S. authorities related to sales of products and services linked to the Crimea region of Ukraine, which sales potentially violated European Union and U.S. sanctions provisions. Although the U.S. investigation closed without further implication, the Dutch investigation continued. The Dutch Investigator concluded his investigation in March 2022 and provided the results to the Public Prosecutor’s office for review. Specifically, the Investigator concluded that the sales transactions violated EU sanctions. The conclusion in the Investigator's report was consistent with the Company's understanding of what could be stated in the report and was the basis to record an expense representing the low end of a reasonable range of financial penalties the Company may incur in the six-month period ended February 28, 2021. The Company has not adjusted its estimate of financial penalties as a result of the completion of the investigation in the six-month period ended February 28, 2022. While there can be no assurance of the ultimate outcome of the matter, the Company currently believes that there will be no material adverse effect on the Company's financial position, results of operations or cash flows from this matter.

Note 14. Leases

The Company has operating leases for real estate, vehicles, manufacturing equipment, IT equipment and office equipment (the Company does not have any financing leases). Our leases typically range in term from 3 to 15 years and may contain renewal options for periods up to 5 years at our discretion. Operating leases are recorded as operating lease ROU assets in “Other long-term assets” and operating lease liabilities in “Other current liabilities” and “Other long-term liabilities” of the Condensed Consolidated Balance Sheets. There have been no material changes to our operating lease ROU assets and operating lease liabilities during the six months ended February 28, 2022.

The components of lease expense were as follows (in thousands):

	Three Months Ended February 28,				Six Months Ended February 28,
	2022		2021		2022		2021
Lease Cost:
Operating lease cost	$	3,698	$	3,766	$	7,423	$	7,471
Short-term lease cost	399		397		849		810
Variable lease cost	1,110		865		2,014		1,747

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Supplemental cash flow and other information related to leases were as follows (in thousands):

	Six Months Ended February 28,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	7,190	$	7,486
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	3,598		1,360

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

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 is a global leader in the engineering and manufacturing of 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. The Company has one reportable segment, IT&S. This segment is primarily engaged in the design, manufacture and distribution of branded hydraulic and mechanical tools, as well as providing services and tool rental to the industrial, maintenance, infrastructure, oil & gas, alternative energy and other markets. Financial information related to the Company's reportable segment is included in Note 12, "Segment Information" in the notes to the condensed consolidated financial statements.

Our businesses provide an array of products and services across multiple markets and geographies, which results in significant diversification. The IT&S segment and the Company are well-positioned to drive shareholder value through a sustainable business strategy built on well-established brands, broad global distribution and end markets, clear focus on the core tools and services business and disciplined capital deployment.

Our Business Model

Our long-term goal is to create shareholder value and best in class returns through growth of our core businesses, driving efficiency and profitability, generating strong cash flow, and being disciplined in the deployment of our capital.We intend to leverage our strong brand, market positions, and dealer and distribution networks to generate organic core sales growth that exceeds end-market growth rates. Organic growth is accomplished through a combination of market share capture and product innovation, as well as market expansion into new vertical markets, emerging industries and new geographic regions. In addition to organic growth, we also focus on profit margin expansion by utilizing continuous improvement techniques to drive productivity and lower costs and by enacting routine pricing initiatives to generate price realization and offset cost increases, such as commodity and tariff increases and general inflation. Finally, cash flow generation is critical to achieving our financial and long-term strategic objectives. Strong cash flow generation is achieved by maximizing returns on assets and minimizing primary working capital needs. The cash flow that results from efficient asset management and improved profitability is used to fund internal growth opportunities, strategic acquisitions, pay down of debt and opportunistic returns for shareholders. In March 2022, the Company launched the ASCEND transformation program focused on driving accelerated growth and margin expansion through improvements on how we go to market, innovate, buy materials, manufacture product and serve customers.

General Business Update

During largely the second half of fiscal 2020 and through the first three quarters of fiscal 2021, our business, like many others around the world, experienced significant negative financial impacts from the COVID-19 pandemic. Beginning in the third quarter of fiscal 2021, we returned to year-over-year core growth in all regions. In the first six months of fiscal 2022, we continued to see strong growth in most regions that we operate, however, there are still regions that remain challenged by the lingering effects of the pandemic, most notably on our European service business in the second quarter of fiscal 2022. Our key manufacturing facilities continue to operate with additional precautions in place to ensure the safety of our employees and prevent production disruptions. Like many other businesses around the world, increased demand as global economies have returned to more normalized levels has stressed our supply chain, and increased demand and pandemic related factors have also created challenges in freight lines and the overall logistics environment. This has led to increased raw material, components and logistics costs, as well as longer lead times on orders. We continue to closely monitor our supply chain in order to ensure we can maintain competitive lead times and deliver products to customers timely. In February 2022, Russian forces invaded Ukraine, and in response, the member countries of NATO initiated a variety of sanctions and export controls targeting Russia and associated entities. Approximately 1% of our annual sales are to customers and distributors associated with Russia and we had approximately $0.5 million of receivables associated with those customers and distributors as of February 28, 2022. The sanctions currently in place limit our ability to provide goods to those customers and distributors and banking sanctions effectively negate our ability to collect those receivables; as such, we have recorded

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a full allowance for doubtful accounts against those receivables as of February 28, 2022. We will continue to monitor the situation with Russia to assess when and if we are able to resume business with those customers and distributors, including collection of the outstanding receivables. We also continue to monitor and manage the ancillary impact of the Russia crisis on our business, which is primarily related to supply chain, increased commodity costs, foreign exchange rate volatility and dealer confidence particularly in Central Europe. Despite pandemic-related demand challenges, the supply chain and logistics challenges we are currently experiencing, and the impact of the sanctions on Russia, our balance sheet remains strong and the Company continues to focus on the execution of our strategic growth initiatives in the markets we serve. We remain focused on new product development, driving organic growth and pursuing disciplined acquisition opportunities.

Results of Operations

The following table sets forth our results of continuing operations (dollars in millions, except per share amounts):

	Three Months Ended February 28,								Six Months Ended February 28,
	2022				2021				2022				2021
Net sales	$	137	100	%	$	121	100	%	$	268	100	%	$	240	100	%
Cost of products sold	77		56	%	66		54	%	148		55	%	130		54	%
Gross profit	60		44	%	55		45	%	120		45	%	110		46	%
Selling, general and administrative expenses	51		37	%	46		38	%	99		37	%	90		38	%
Amortization of intangible assets	2		1	%	2		2	%	4		1	%	4		2	%
Restructuring charges	2		1	%	1		1	%	5		2	%	1		0	%
Impairment & divestiture charges	1		1	%	0		0	%	1		0	%	0		0	%
Operating profit	4		3	%	6		5	%	11		4	%	15		6	%
Financing costs, net	1		1	%	1		1	%	2		1	%	3		1	%
Other expense, net	0		0	%	1		1	%	1		0	%	1		0	%
Earnings before income tax expense	3		2	%	4		3	%	8		3	%	11		5	%
Income tax expense	1		1	%	0		0	%	3		1	%	3		1	%
Net earnings from continuing operations	2		1	%	4		3	%	5		2	%	8		3	%
Diluted earnings per share from continuing operations	$	0.03			$	0.06			$	0.09			$	0.14

Consolidated net sales for the second quarter of fiscal 2022 were $137 million, an increase of $16 million, or 13%, from the prior-year comparable period. Core sales increased $19 million, or 16%, while the changes in foreign currency exchange rates unfavorably impacted net sales by 2%. The increase in core sales was due to the substantial increase in sales volume resulting from pandemic-related market recovery, and to a lesser extent, the results of pricing actions in response to increasing costs of raw materials, components, and freight. The continuation of supply chain and logistics challenges first seen in the fourth quarter of fiscal 2021 led to longer lead times throughout the second quarter of fiscal 2022 and larger than usual backlogs remained at February 28, 2022, which negatively impacted the quarter as compared to the second quarter of fiscal 2021. Core products sales increased 16% and core service sales increased 13% as compared to the same period in the prior year, though effects from greater incidence of COVID-19 due to new variants had detrimental impacts on core service sales in the second quarter of fiscal 2022, with a year-over-year decline in service sales in Europe due to our inability to mobilize our work force as a result of enhanced COVID-19 restrictions. Gross profit margins remained effectively flat as compared to the prior-year second quarter, as pricing actions were only able to offset the increased costs in the supply chain and logistics environments. Operating profit was $2 million lower in the second quarter of fiscal 2022 as compared to the second quarter of fiscal 2021. The $5 million increase in gross profit was offset by the $5 million increase in selling, general, and administrative expenses ("SG&A"). We also incurred an additional $1 million of restructuring charges in the second quarter of fiscal 2022 as compared to the second quarter of fiscal 2021 and recorded $1 million of impairment & divestiture charges. The $5 million increase in SG&A was primarily due to $3 million discrete bad debt charges taken (approximately $2 million due to significant delinquency in payments from an agent in our Middle East region as well as less than $1 million to reserve for collection risk for customers and distributors associated with Russia), senior leadership transition charges ($2 million) and business review charges related to external support for the deep-dive holistic business review ($2 million), partially offset by reduced incentive compensation costs ($2 million). Restructuring charges increased $1 million as compared to the prior period as a result of charges to streamline and flatten the organizational structure in the second quarter of fiscal 2022 and we recorded impairment & divestiture charges of $1 million associated with impairments on two intangible assets.

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Consolidated net sales for the first half of fiscal 2022 were $268 million, an increase of $28 million or 11% from the prior-year comparable period. Core sales increased $30 million, or 13%, while the changes in foreign currency exchange rates unfavorably impacted net sales by 1%. The increase in core sales was due to the substantial increase in sales volume resulting from pandemic-related market recovery, and to a lesser extent, the results of pricing actions in response to increasing costs of raw materials, components, and freight. The continuation of supply chain and logistics challenges seen in the fourth quarter of fiscal 2021 led to longer lead times throughout the first half of fiscal 2022 and larger than usual backlogs at February 28, 2022, which negatively impacted the first six months of fiscal 2022. Core products sales increased 15% while core service sales only increased 4% as compared to the same period in the prior year. Gross profit margins remained effectively flat as compared to the prior-year first half as pricing actions were only able to offset increased costs in the supply chain and logistics environments. Operating profit was $4 million lower in the first half of fiscal 2022 as compared to the first half of fiscal 2021. Although gross profit increased $10 million year-year-over year, SG&A expenses increased $9 million, restructuring charges increased $4 million, and we incurred $1 million of impairment & divestiture charges. The increase in SG&A expenses is primarily due to CEO transition costs ($4 million), discrete bad debt charges taken due to significant delinquency in payments from an agent in our Middle East region and also to reserve for collection risk for customers and distributors associated with Russia ($3 million in aggregate, approximately $2 million in the Middle East and less than $1 million for customers associated with Russia), senior leadership transition charges ($2 million) and business review charges related to external support for the deep-dive holistic business review ($2 million), partially offset by a decrease in employee compensation costs ($2 million). Restructuring charges increased $4 million as compared to the prior period as a result of charges to streamline and flatten the organizational structure and we recorded impairment & divestiture charges of $1 million associated with impairments on two intangible assets.

Segment Results

IT&S Segment

The IT&S segment is a global supplier of branded hydraulic and mechanical tools and services to a broad array of end markets, including infrastructure, industrial maintenance, repair, and operations, oil & gas, mining, alternative and renewable energy and construction markets. Its primary products include branded tools, cylinders, hydraulic torque wrenches, highly engineered heavy lifting technology solutions and other tools (Product product line). On the service and rental side, the segment provides maintenance and manpower services to meet customer-specific needs and rental capabilities for certain of our products (Service & Rental product line). The following table sets forth the results of operations for the IT&S segment (dollars in millions):

	Three Months Ended February 28,						Six Months Ended February 28,
	2022			2021			2022			2021
Net sales	$	126		$	113		$	247		$	225
Operating profit	13			14			31			31
Operating profit %	10.0		%	12.3		%	12.4		%	13.8		%

IT&S segment net sales for the second quarter of fiscal 2022 increased by $13 million, or 12%. Core sales increased $16 million, or 14%, year-over-year due to the substantial increase in sales volume resulting from pandemic-related market recovery, and to a lesser extent, the results of pricing actions in response to increasing costs of raw materials, components, and freight. The continuation of supply chain and logistics challenges initially seen in the fourth quarter of fiscal 2021 led to longer lead times throughout the second quarter of fiscal 2022 and larger than usual backlogs at February 28, 2022, which negatively impacted the quarter.

Operating profit percentage decreased 2.3% from the prior-year quarter as pricing actions were wholly offset by the increased costs in the supply chain and logistics environments, $3 million of discrete bad debt expense was recorded in the quarter and restructuring charges increased $1 million in order to flatten and streamline the organization.

Year-to-date IT&S segment net sales increased by $22 million, or 10%. Core sales increased $25 million, or 11%, year-over-year due to the substantial increase in sales volume resulting from pandemic-related market recovery, and to a lesser extent, the results of pricing actions in response to increasing costs of raw materials, components, and freight. The continuation of supply chain and logistics challenges from the fourth quarter of fiscal 2021 led to longer lead times throughout the first six months of fiscal 2022 and larger than usual backlogs at February 28, 2022, which negatively impacted the first half of fiscal 2022.

Operating profit percentage decreased 1.4% from the prior-year six-month period as pricing actions were wholly offset by the increased costs in the supply chain and logistics environments, $3 million of discrete bad debt expense recorded in the first six months of fiscal 2022 and an increase of $2 million in restructuring charges to flatten and streamline the organization.

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Corporate

Corporate expenses were $8 million and $6 million in the three months ended February 28, 2022 and 2021, respectively, and $19 million and $13 million for the six months ended February 28, 2022 and 2021, respectively. This represents an increase of $2 million and $6 million for the three and six months ended February 28, 2022, respectively. The increase for the three months ended February 28, 2022 was a result of business review charges related to external support for the deep-dive holistic business review ($2 million) and senior leadership transition charges ($1 million), partially offset by a decrease in incentive compensation charges ($1 million). The increase for the six months ended February 28, 2022 was a result of CEO transition costs ($4 million), business review charges related to external support for the deep-dive holistic business review ($2 million), senior leadership transition charges ($1 million) and an increase in restructuring charges to streamline and flatten the Corporate structure ($1 million), partially offset by a decrease in incentive compensation ($2 million).

Financing Costs, net

Net financing costs were $1 million for both the three months ended February 28, 2022 and 2021. For the six months ended February 28, 2022 and 2021, net financing costs were $2 million and $3 million, respectively. Financing costs decreased as the outstanding amount on our revolver has decreased $80 million as compared to the amount outstanding at November 30, 2020.

Income Tax Expense

The Company's global operations, acquisition activity (as applicable) and specific tax attributes provide opportunities for continuous global tax planning initiatives to maximize tax credits and deductions. Comparative earnings before income taxes, income tax expense and effective income tax rates from continuing operations are as follows (dollars in millions):

	Three Months Ended February 28,						Six Months Ended February 28,
	2022			2021			2022			2021
Earnings from continuing operations before income tax expense	$	3		$	4		$	8		$	11
Income tax expense	1			0			3			2
Effective income tax rate	38.7		%	0.0		%	37.0		%	21.2		%

The Company’s earnings from continuing operations before income taxes include earnings from both U.S. and foreign jurisdictions. Though most foreign tax rates are now in line with the U.S. tax rate of 21%, the annual effective tax rate is impacted by withholding taxes, losses in jurisdictions where no benefit can be realized, and various aspects of the U.S. Tax Cuts and Jobs Act, such as the Global Intangible Low-Taxed Income, Foreign-Derived Intangible Income and Base Erosion and Anti-Abuse Tax provisions.

The effective tax rate for the three months ended February 28, 2022 was 38.7%, compared to 0.0% for the comparable prior-year period. Overall, both time periods are significantly impacted by year-to-date losses and deductions in jurisdictions where no tax benefit can be realized. The lower effective tax rate for the three months ended February 28, 2021 was primarily driven by tax benefits related to stock compensation and tax planning initiatives that did not recur in the current year. Additionally, both the current and prior-year effective income tax rates include the impact of non-recurring items.

Cash Flows and Liquidity

At February 28, 2022, we had $133 million of cash and cash equivalents of which $129 million was held by our foreign subsidiaries and $4 million was held domestically. The following table summarizes our cash flows provided by (used in) operating, investing and financing activities (in millions):

	Six Months Ended February 28,
	2022		2021
Cash provided by operating activities	$	5	$	13
Cash used in investing activities	(5)		(5)
Cash used in financing activities	(6)		(48)
Effect of exchange rate changes on cash	(1)		3
Net decrease in cash and cash equivalents	$	(7)	$	(37)

Net cash provided by operating activities was $5 million for the six months ended February 28, 2022 as compared to $13 million for the six months ended February 28, 2021. This is a result of the payout of the fiscal 2021 annual bonus in the first quarter of fiscal 2022 (the fiscal 2020 bonus plan was suspended in response to the COVID-19 pandemic, as such, there was no such payment in the first quarter of fiscal 2021), payment of the Company portion of social security taxes in the second quarter of fiscal 2022 that were originally deferred in calendar 2020 under section 2302 of the CARES Act, as well as greater cash used for primary working capital in

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the first six months of fiscal 2022, predominantly associated with increased inventory levels as a result of rising supply chain costs and logistics challenges.

Net cash used in investing activities was $5 million for both the six months ended February 28, 2022 and 2021. The cash used in investing activities for both fiscal years primarily related to capital expenditures.

Net cash used in financing activities was $6 million for the six months ended February 28, 2022 compared to $48 million for the six months ended February 28, 2021. The net cash used in financing activities for the first six months of fiscal 2022 predominantly consisted of $2 million paid for the annual dividend and $4 million for taxes paid related to the net share settlement of equity awards. The net cash used in the first six months of fiscal 2021 predominantly consisted of a $45 million principal payment on our revolving credit facility with excess cash on hand, $2 million each for the annual dividend payment and for taxes paid related to the net share settlement of equity awards, partially offset by receipt of $1 million for the final installment payment on the sale of the former EC&S segment.

The Company's Senior Credit Facility is comprised of a $400 million revolving line of credit and previously provided for a $200 million term loan, both scheduled to mature in March 2024 (see Note 7, "Debt" in the notes to the condensed consolidated financial statements for further details of the Senior Credit Facility). Outstanding borrowings under the Senior Credit Facility revolving line of credit were $175 million as of February 28, 2022. The unused credit line and amount available for borrowing under the revolving line of credit was $219 million at February 28, 2022 after reduction for $6 million of outstanding letters of credit issued under the Senior Credit Facility.

We believe that the revolving credit line, combined with our existing cash on hand and anticipated operating cash flows, will be adequate to meet operating, debt service, acquisition and capital expenditure funding requirements for the foreseeable future.

Primary Working Capital Management

We use primary working capital as a percentage of sales (PWC %) as a key metric of working capital management. We define this metric as the sum of net accounts receivable and net inventory less accounts payable, divided by the past three months sales annualized. The following table shows a comparison of primary working capital (dollars in millions):

	February 28, 2022		PWC%		August 31, 2021		PWC%
Accounts receivable, net	$	113	21	%	$	103	18	%
Inventory, net	89		16	%	75		13	%
Accounts payable	(66)		(12)	%	(62)		(11)	%
Net primary working capital	$	136	25	%	$	116	20	%

Commitments and Contingencies

We are contingently liable for certain lease payments under leases within businesses we previously divested or spun-off. If any of these businesses do not fulfill their future lease payment obligations under a lease, we could be liable for such obligations, however, the Company does not believe it is probable that it will be required to satisfy these obligations. Future minimum lease payments for these leases at February 28, 2022 were $4 million with monthly payments extending to fiscal 2025.

We had outstanding letters of credit totaling $9 million and $12 million at February 28, 2022 and August 31, 2021, respectively, the majority of which relate to commercial contracts and self-insured workers' compensation programs.

We are also subject to certain contingencies with respect to legal proceedings and regulatory matters which are described in Note 13, "Commitments and Contingencies" in the notes to the condensed consolidated financial statements. While there can be no assurance of the ultimate outcome of these matters, the Company believes that there will be no material adverse effect on the Company's results of operations, financial position or cash flows.

Contractual Obligations

Our contractual obligations have not materially changed at February 28, 2022 from what was previously disclosed in Part 1, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the heading “Contractual Obligations” in our Annual Report on Form 10-K for the year ended August 31, 2021.

Critical Accounting Estimates

Management has evaluated the accounting estimates used in the preparation of the Company's condensed consolidated financial statements and related notes and believe those estimates to be reasonable and appropriate. Certain of these accounting estimates are considered by management to be the most critical in understanding judgments involved in the preparation of our condensed consolidated financial statements and uncertainties that could impact our results of operations, financial position and cash flow. For

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information about more of the Company’s policies, methods and assumptions related to critical accounting policies refer to the Critical Accounting Policies in Part 1, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in the Annual Report on Form 10-K for the year ended August 31, 2021.

Item 3 – Quantitative and Qualitative Disclosures about Market Risk

The diverse nature of our business activities necessitates the management of various financial and market risks, including those related to changes in interest rates, foreign currency exchange rates and commodity costs.

Interest Rate Risk: In the current economic environment, we manage interest expense using a mixture of variable-rate debt and fixed-interest-rate swaps. As of February 28, 2022, long-term debt consisted of $175 million of borrowing under the revolving line of credit (variable rate debt).

Foreign Currency Risk: We maintain operations in the U.S. and various foreign countries. Our more significant non-U.S. operations are located in Australia, the Netherlands, the United Kingdom, United Arab Emirates and China, and we have foreign currency risk relating to receipts from customers, payments to suppliers and intercompany transactions denominated in foreign currencies. Under certain conditions, we enter into hedging transactions (primarily foreign currency exchange contracts) that enable us to mitigate the potential adverse impact of foreign currency exchange rate risk (see Note 9, “Derivatives” for further information). We do not engage in trading or other speculative activities with these transactions, as established policies require that these hedging transactions relate to specific currency exposures.

The strengthening of the U.S. dollar against most currencies can have an unfavorable impact on our results of operations and financial position as foreign denominated operating results are translated into U.S. dollars. To illustrate the potential impact of changes in foreign currency exchange rates on the translation of our results of operations, quarterly sales and operating profit were remeasured assuming a ten percent decrease in all foreign exchange rates compared with the U.S. dollar. Using this assumption, quarterly sales would have been lower by $6 million and operating profit would have been lower by less than $1 million, respectively, for the three months ended February 28, 2022. This sensitivity analysis assumes that each exchange rate would change in the same direction relative to the U.S. dollar and excludes the potential effects that changes in foreign currency exchange rates may have on sales levels or local currency prices. Similarly, a ten percent decline in foreign currency exchange rates versus the U.S. dollar would result in a $43 million reduction to equity (accumulated other comprehensive loss) as of February 28, 2022, as a result of non-U.S. dollar denominated assets and liabilities being translated into U.S. dollars, our reporting currency.

Commodity Cost Risk: We source a wide variety of materials and components from a network of global suppliers. While such materials are typically available from numerous suppliers, commodity raw materials, such as steel and plastic resin, are subject to price fluctuations, which could have a negative impact on our results. We strive to pass along such commodity price increases to customers to avoid profit margin erosion.

Item 4 – Controls and Procedures

Evaluation of Disclosure Controls and Procedures.

Under the supervision and with the participation of our senior management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this quarterly report (the “Evaluation Date”). Based on this evaluation, our chief executive officer and chief financial officer concluded as of the Evaluation Date that our disclosure controls and procedures were effective such that the information relating to the Company, including consolidated subsidiaries, required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to the Company’s management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). There have been no changes in our internal control over financial reporting that occurred during the quarter ended February 28, 2022 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds    

The Company's Board of Directors has authorized the repurchase of shares of the Company's common stock under publicly announced share repurchase programs. Since the inception of the initial share repurchase program in fiscal 2012, the Company has repurchased 22,799,230 shares of common stock for $668 million. As of February 28, 2022, the maximum number of shares that may yet be purchased under the programs is 5,200,770 shares. The Company suspended the share repurchase program in response to the COVID-19 pandemic in the third quarter of fiscal 2020 and accordingly, did not repurchase shares in either of the six months ended February 28, 2022 or 2021. As the Company again considers strategic share repurchases, the Company's Board of Directors, in March 2022, rescinded its prior share repurchase authorization and authorized the repurchase of a total of 10,000,000 shares.

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Item 6 – Exhibits

Exhibit	Description	Incorporated Herein By Reference To	Filed Herewith	Furnished Herewith
2.1	Securities Purchase Agreement, dated as of July 8, 2019, by and between Actuant Corporation, BRWS Parent LLC, Actuant France SAS and Actuant Holdings AB	Exhibit 2.1 to the Registrant's Current Report on Form 8-K filed on July 9, 2019
10.1	Letter agreement dated January 30, 2022 between Rick T. Dillon and Enerpac Tool Group Corp.	Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on January 31, 2022
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002		X
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002		X
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002			X
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002			X
101.INS	XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH	Inline XBRL Taxonomy Extension Schema		X
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase		X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase		X
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase		X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase		X
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in the Interactive Data Files submitted as Exhibit 101)

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ENERPAC TOOL GROUP CORP.
	(Registrant)
Date: March 24, 2022	By:	/S/ BRYAN R. JOHNSON
		Bryan R. Johnson
		VP of Finance and Principal Accounting Officer

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, Paul E. Sternlieb, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Enerpac Tool Group Corp.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting

Date: March 24, 2022

/s/ Paul E. Sternlieb

Paul E. Sternlieb
Chief Executive Officer and President

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Rick T. Dillon, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Enerpac Tool Group Corp.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting

Date: March 24, 2022

/s/ Rick T. Dillon

Rick T. Dillon

Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

WRITTEN STATEMENT OF THE CHIEF EXECUTIVE OFFICER

Pursuant to 18 U.S.C. ss.1350, I, the undersigned Chief Executive Officer and President of Enerpac Tool Group Corp. (the “Company”), hereby certify, based on my knowledge, that the Quarterly Report on Form 10-Q of the Company for the quarterly period ended November 30, 2021 (the “Report”) fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in the Report.

Date: March 24, 2022

/s/ Paul E. Sternlieb

Paul E. Sternlieb

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Enerpac Tool Group Corp. and will be retained by Enerpac Tool Group Corp. and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished to the Securities and Exchange Commission as an exhibit to the Form 10-Q and shall not be considered filed as part of the Form 10-Q.

EX-32.2

Exhibit 32.2

WRITTEN STATEMENT OF THE CHIEF FINANCIAL OFFICER

Pursuant to 18 U.S.C. ss.1350, I, the undersigned Executive Vice President and Chief Financial Officer of Enerpac Tool Group Corp. (the “Company”), hereby certify, based on my knowledge, that the Quarterly Report on Form 10-Q of the Company for the quarterly period ended November 30, 2021 (the “Report”) fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in the Report.

Date: March 24, 2022

/s/ Rick T. Dillon

Rick T. Dillon

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Enerpac Tool Group Corp. and will be retained by Enerpac Tool Group Corp. and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished to the Securities and Exchange Commission as an exhibit to the Form 10-Q and shall not be considered filed as part of the Form 10-Q.

XML

Document and Entity Information - $ / shares	6 Months Ended
	Feb. 28, 2022	Mar. 18, 2022	Aug. 31, 2021
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Feb. 28, 2022
Document Transition Report	false
Entity File Number	1-11288
Entity Registrant Name	ENERPAC TOOL GROUP CORP.
Entity Incorporation, State or Country Code	WI
Entity Tax Identification Number	39-0168610
Entity Address, Address Line One	N86 W12500 WESTBROOK CROSSING
Entity Address, City or Town	MENOMONEE FALLS
Entity Address, State or Province	WI
Entity Address, Postal Zip Code	53051
City Area Code	262
Local Phone Number	293-1500
Title of 12(b) Security	Class A common stock, $0.20 par value per share
Trading Symbol	EPAC
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		60,551,177
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Entity Central Index Key	0000006955
Current Fiscal Year End Date	--08-31
Common Class A
Document Information [Line Items]
Common Stock, Par or Stated Value Per Share	$ 0.20		$ 0.20
Common Stock, Shares Authorized	168,000,000		168,000,000
Common Stock, Shares, Issued	83,344,526		83,021,654

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2022	Feb. 28, 2021	Feb. 28, 2022	Feb. 28, 2021
Income Statement [Abstract]
Net Sales	$ 136,599	$ 120,654	$ 267,502	$ 240,084
Cost of products sold	76,618	65,878	147,895	130,044
Gross profit	59,981	54,776	119,607	110,040
Selling, General and Administrative Expense	50,668	45,883	99,145	89,593
Amortization of intangible assets	1,881	2,136	3,886	4,272
Restructuring Charges	1,832	649	4,569	859
Impairment & divestiture (benefits) charges	1,116	401	1,116	539
Operating profit	4,484	5,707	10,891	14,777
Financing costs, net	755	1,338	1,716	3,055
Other expense, net	271	784	751	1,058
Income tax (benefit) expense	1,337	1	3,118	2,258
Net Earnings from Continuing Operations	2,121	3,584	5,306	8,406
Net (Loss) Earnings from Discontinued Operations	(900)	(402)	(1,297)	(626)
Net (loss) earnings	$ 1,221	$ 3,182	$ 4,009	$ 7,780
Earnings (loss) per share
(Loss) Earnings per share from Continuing Operations, Per Basic Share	$ 0.04	$ 0.06	$ 0.09	$ 0.14
(Loss) Earnings per share from Continuing Operations, Per Diluted Share	0.03	0.06	0.09	0.14
(Loss) Earnings per share from Discontinued Operations, Per Basic Shares	(0.01)	(0.01)	(0.02)	(0.01)
(Loss) Earnings per share from Discontinued Operations, Per Diluted Share	(0.01)	(0.01)	(0.02)	(0.01)
(Loss) Earnings Per Share, Basic	0.02	0.05	0.07	0.13
(Loss) Earnings Per Share, Diluted	$ 0.02	$ 0.05	$ 0.07	$ 0.13
Weighted average common shares outstanding
Weighted average common shares outstanding - basic	60,387	59,938	60,324	59,874
Weighted Average Common Shares outstanding - diluted	60,689	60,269	60,655	60,180
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest, Total	$ 3,458	$ 3,585	$ 8,424	$ 10,664

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2022	Feb. 28, 2021	Feb. 28, 2022	Feb. 28, 2021
Net (loss) earnings	$ 1,221	$ 3,182	$ 4,009	$ 7,780
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments	1,519	9,034	(8,861)	10,434
Pension and other postretirement benefit plans	225	123	561	352
Other Comprehensive (Loss) Income, Net of Tax	1,744	9,157	(8,300)	10,786
Comprehensive (loss) income	$ 2,965	$ 12,339	$ (4,291)	$ 18,566

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Feb. 28, 2022	Aug. 31, 2021
Current assets
Cash and cash equivalents	$ 133,430	$ 140,352
Accounts receivable, net	113,460	103,233
Inventories, net	89,479	75,347
Other current assets	37,694	38,503
Total current assets	374,063	357,435
Property, plant and equipment, net	46,480	48,590
Goodwill	273,437	277,593
Other intangible assets, net	48,608	54,545
Other long-term assets	78,874	82,084
Total assets	821,462	820,247
Current liabilities
Trade accounts payable	66,422	61,958
Accrued compensation and benefits	20,852	21,597
Income taxes payable	6,270	5,674
Other current liabilities	46,772	45,535
Total current liabilities	140,316	134,764
Long-term debt, net	175,000	175,000
Deferred Income Taxes	5,540	4,397
Pension and postretirement benefit liabilities	16,805	17,783
Other long-term liabilities	70,778	76,105
Total liabilities	408,439	408,049
Shareholders’ equity
Class A common stock, $0.20 par value per share, authorized 168,000,000 shares, issued 83,344,526 and 83,021,654 shares, respectively	16,669	16,604
Additional paid-in capital	208,022	202,971
Treasury stock, at cost, 22,799,230 shares	(667,732)	(667,732)
Retained earnings	957,348	953,339
Accumulated other comprehensive loss	(101,284)	(92,984)
Stock held in trust	(3,089)	(3,067)
Deferred compensation liability	3,089	3,067
Total shareholders' equity	413,023	412,198
Total liabilities and shareholders’ equity	$ 821,462	$ 820,247

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares	Feb. 28, 2022	Aug. 31, 2021
Treasury Stock, Shares	22,799,230	22,799,230
Common Class A
Common Stock, Shares Authorized	168,000,000	168,000,000
Common Stock, Shares, Issued	83,344,526	83,021,654

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Feb. 28, 2022	Feb. 28, 2021
Operating Activities
Net (loss) earnings	$ 4,009	$ 7,780
Net (Loss) Earnings from Discontinued Operations	(1,297)	(626)
Net Earnings from Continuing Operations	5,306	8,406
Adjustments to reconcile net earnings to net cash provided by operating activities:
Impairment & divestiture (benefits) charges, net of tax	1,116	482
Depreciation and amortization	10,162	10,966
Stock-based compensation expense	8,289	5,228
Provision for (benefit from) deferred income taxes	418	(398)
Amortization of debt issuance costs	240	240
Other non-cash (benefits) charges	(254)	514
Changes in components of working capital and other:
Accounts receivable	(11,889)	(9,920)
Inventories	(15,787)	(1,505)
Trade accounts payable	4,072	4,114
Prepaid expenses and other assets	1,478	(7,047)
Income tax accounts	2,430	692
Accrued compensation and benefits	(520)	3,785
Other accrued liabilities	180	(2,057)
Cash provided by (used in) operating activities, Continuing Operations	5,241	13,500
Cash (used in) provided by operating activities, Discontinued Operations	(564)	(254)
Cash (Used in) Provided By Operating Activities	4,677	13,246
Investing Activities
Capital expenditures	(4,830)	(5,630)
Proceeds from sale of property, plant and equipment	163	595
Cash used in investing activities, Continuing Operations	(4,667)	(5,035)
Cash Provided by Investing Activities	(4,667)	(5,035)
Financing Activities
Borrowings on Revolving Credit	15,000	10,000
Principal Repayment on Revolving Credit Facility	(15,000)	(55,000)
Taxes paid related to the net share settlement of equity awards	(3,375)	(1,981)
Stock option exercises and other	152	182
Cash dividend	(2,409)	(2,394)
Net Cash Used in Financing Activities, Continuing Operations	(5,632)	(49,193)
Cash Used in Financing Activities, Discontinued Operations	0	750
Cash used in financing activities	(5,632)	(48,443)
Effect of exchange rate changes on cash	(1,300)	3,316
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect, Total	(6,922)	(36,916)
Cash and cash equivalents - beginning of period	140,352	152,170
Cash and cash equivalents - end of period	$ 133,430	$ 115,254

XML

Basis of Presentation Schedule of Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Feb. 28, 2022

Schedule of Accumulated Other Comprehensive Income (Loss) [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

Accumulated Other Comprehensive Loss

The following is a summary of the Company's accumulated other comprehensive loss (in thousands):

	February 28, 2022		August 31, 2021
Foreign currency translation adjustments	$	78,847	$	69,986
Pension and other postretirement benefit plans, net of tax	22,437		22,998
Accumulated other comprehensive loss	$	101,284	$	92,984

XML

Earnings per Share and Shareholders' Equity Shareholders Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Stock held in trust [member] [Member]	Deferred Compensation, Share-based Payments [Member]
Stock Issued During Period, Shares, New Issues		82,594
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ 359,226	$ 16,519	$ 193,492	$ (667,732)	$ 917,671	$ (100,724)	$ (2,562)	$ 2,562
Net (loss) earnings	7,780				7,780
Other Comprehensive (Loss) Income, Net of Tax	10,786					10,786
Stock Issued During Period, Shares, Employee Benefit Plan		10
Stock Issued During Period, Value, Employee Benefit Plan	182	$ 2	180
Stock Issued During Period, Shares, Restricted Stock Award, Gross		255
Stock Issued During Period, Value, Restricted Stock Award, Gross	0	$ 51	(51)
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	5,227		5,227
Adjustments to Additional Paid in Capital, Income Tax Benefit from Share-based Compensation	(1,981)		(1,981)
Stock Issued To Acquired For And Distributed From Rabbi Trust		20
Stock Value Issued to Acquired For and Distributed From Rabbi Trust	173	$ 4	169				(434)	434
Stock Issued During Period, Shares, New Issues		82,625
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	367,946	$ 16,525	195,979	(667,732)	922,269	(99,095)	(2,643)	2,643
Net (loss) earnings	3,182				3,182
Other Comprehensive (Loss) Income, Net of Tax	9,157					9,157
Stock Issued During Period, Shares, Employee Benefit Plan		4
Stock Issued During Period, Value, Employee Benefit Plan	81	$ 1	80
Stock Issued During Period, Shares, Restricted Stock Award, Gross		235
Stock Issued During Period, Value, Restricted Stock Award, Gross	0	$ 47	(47)
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	2,647		2,647
Adjustments to Additional Paid in Capital, Income Tax Benefit from Share-based Compensation	(1,706)		(1,706)
Stock Issued To Acquired For And Distributed From Rabbi Trust		15
Stock Value Issued to Acquired For and Distributed From Rabbi Trust	86	$ 3	83				(353)	353
Stock Issued During Period, Shares, New Issues		82,879
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	381,393	$ 16,576	197,036	(667,732)	925,451	(89,938)	(2,996)	2,996
Stock Issued During Period, Shares, New Issues		83,022
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	412,198	$ 16,604	202,971	(667,732)	953,339	(92,984)	(3,067)	3,067
Adoption of Accounting Standards	953,339
Net (loss) earnings	4,009				4,009
Other Comprehensive (Loss) Income, Net of Tax	(8,300)					(8,300)
Stock Issued During Period, Shares, Employee Benefit Plan		7
Stock Issued During Period, Value, Employee Benefit Plan	150	$ 2	148
Stock Issued During Period, Shares, Restricted Stock Award, Gross		314
Stock Issued During Period, Value, Restricted Stock Award, Gross	0	$ 63	(63)
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	8,289		8,289
Adjustments to Additional Paid in Capital, Income Tax Benefit from Share-based Compensation	(3,373)		(3,373)
Stock Issued To Acquired For And Distributed From Rabbi Trust		2
Stock Value Issued to Acquired For and Distributed From Rabbi Trust	50		50				(22)	22
Stock Issued During Period, Shares, New Issues		83,092
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	409,806	$ 16,622	207,817	(667,732)	956,127	(103,028)	(3,092)	3,092
Net (loss) earnings	1,221				1,221
Other Comprehensive (Loss) Income, Net of Tax	1,744					1,744
Stock Issued During Period, Shares, Employee Benefit Plan		5
Stock Issued During Period, Value, Employee Benefit Plan	65	$ 1	64
Stock Issued During Period, Shares, Restricted Stock Award, Gross		247
Stock Issued During Period, Value, Restricted Stock Award, Gross	0	$ 46	(46)
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	2,142		2,142
Adjustments to Additional Paid in Capital, Income Tax Benefit from Share-based Compensation	(1,980)		(1,980)
Stock Issued To Acquired For And Distributed From Rabbi Trust		1
Stock Value Issued to Acquired For and Distributed From Rabbi Trust	25	$ 0	25				3	(3)
Stock Issued During Period, Shares, New Issues		83,345
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	413,023	$ 16,669	$ 208,022	$ (667,732)	$ 957,348	$ (101,284)	$ (3,089)	$ 3,089
Adoption of Accounting Standards	$ 957,348

XML

Basis of Presentation

6 Months Ended

Feb. 28, 2022

Accounting Policies [Abstract]

Basis of Presentation

Note 1. Basis of Presentation

General

Enerpac Tool Group Corp. ("Company") is a premier industrial tools and services company serving a broad and diverse set of customers in more than 100 countries. The Company has one reportable segment, Industrial Tools & Service ("IT&S"), and an Other operating segment, which does not meet the criteria to be considered a reportable segment.

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles ("GAAP") for interim financial reporting and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The condensed consolidated balance sheet data as of August 31, 2021 was derived from the Company’s audited financial statements but does not include all disclosures required by GAAP. For additional information, including the Company’s significant accounting policies, refer to the consolidated financial statements and related footnotes in the Company’s fiscal 2021 Annual Report on Form 10-K.

In the opinion of management, all adjustments considered necessary for a fair statement of financial results have been made. Such adjustments consist of only those of a normal recurring nature. Operating results for the three and six months ended February 28, 2022 are not necessarily indicative of the results that may be expected for the entire fiscal year ending August 31, 2022. The COVID-19 pandemic has negatively impacted, and is likely to continue to negatively impact to varying extents, the global economy. The Company's operating results and financial position will continue to be subject to the general economic conditions created by the pandemic, including the current supply chain and logistics environment caused by the sharp increase in demand as global economies recover. The Company also has historically sold products to companies located in or associated with Russia. In response to Russia's invasion of Ukraine, countries that are members of the North Atlantic Treaty Organization ("NATO"), including the United States, have initiated sanctions and export controls targeting Russia and entities associated with Russia which significantly limits our ability to serve certain customers and collect on our outstanding receivables. The duration and extent to which the pandemic and trade sanctions against Russia effect the Company's business will depend on future developments which still remain uncertain.

Recently Adopted Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board ("FASB") issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this update simplify the accounting for income taxes by removing certain exceptions and amending and clarifying existing guidance. The Company adopted this guidance on September 1, 2021. The adoption did not have a material effect on our consolidated financial statements.

Recently Issued Accounting Pronouncements

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which amends ASC 805 to require an acquirer to, at the date of acquisition, recognize and measure contract assets and contract liabilities acquired in accordance with ASU 2014-9, Revenue from Contracts with Customers (Topic 606) as if the entity had originated the contracts. The guidance is effective for fiscal years beginning after December 15, 2022. The Company will adopt this guidance in the event of a business combination subsequent to the effective date of the guidance.

In March 2020, the FASB issued ASU 2020-4, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for a limited time to ease the potential burden of accounting for reference rate reform on financial reporting. This guidance applies to contracts, hedging relationships and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates. The guidance is effective beginning on March 12, 2020 through December 31, 2022. In January 2021, the FASB issued ASU 2021-01 allowing entities to apply certain aspects of ASC 848 (previously ASU 2020-4) to all derivative instruments that undergo a modification of the interest rate used for discounting, margining or contract price alignment as a result of the reference reform. The guidance is also effective through December 31, 2022. The Company has not utilized any of the optional expedients or exceptions available under this guidance. The Company will continue to assess whether this guidance is applicable throughout the effective period.

Accumulated Other Comprehensive Loss

The following is a summary of the Company's accumulated other comprehensive loss (in thousands):

	February 28, 2022		August 31, 2021
Foreign currency translation adjustments	$	78,847	$	69,986
Pension and other postretirement benefit plans, net of tax	22,437		22,998
Accumulated other comprehensive loss	$	101,284	$	92,984

Property Plant and Equipment

The following is a summary of the Company's components of property, plant and equipment (in thousands):

	February 28, 2022		August 31, 2021
Land, buildings and improvements	$	16,409	$	16,617
Machinery and equipment	145,812		145,541
Gross property, plant and equipment	162,221		162,158
Less: Accumulated depreciation	(115,741)		(113,568)
Property, plant and equipment, net	$	46,480	$	48,590

XML

Revenue Recognition Revenue from Contract Customers (Notes)

6 Months Ended

Feb. 28, 2022

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer [Text Block]

Note 2. Revenue from Contracts with Customers

Nature of Goods and Services

The Company generates its revenue under two principal activities, which are discussed below:

Product Sales: Sales of tools, heavy-lifting solutions, and rope and cable solutions are recorded when control is transferred to the customer (i.e., performance obligation has been satisfied). For the majority of the Company’s product sales, revenue is recognized at a point in time when control of the product is transferred to the customer, which generally occurs when the product is shipped from the Company to the customer. For certain other products that are highly customized and have a limited alternative use, and for which the Company has an enforceable right of reimbursement for performance completed to date, revenue is recognized over time. We consider the input measure (efforts-expended or cost-to-cost) or output measure as a fair measure of progress for the recognition of over-time revenue associated with these custom products. For a majority of the Company’s custom products, machine hours and labor hours (efforts-expended measurement) are used as a measure of progress.

Service & Rental Sales: Service contracts consist of providing highly trained technicians to perform bolting, technical services, machining and joint-integrity work for our customers. These revenues are recognized over time as our customers simultaneously receive and consume the benefits provided by the Company. We consider the input measure (efforts-expended or cost-to-cost) or output measure as a fair measure of progress for the recognition of over-time revenue associated with service contracts. For a majority of the Company’s service contracts, labor hours (efforts-expended measurement) is used as the measure of progress when it is determined to be a better depiction of the transfer of control to the customer due to the timing and pattern of labor hours incurred. Revenue from rental contracts (less than a year and non-customized products) is generally recognized ratably over the contract term, depicting the customer’s consumption of the benefit related to the rental equipment.

Disaggregated Revenue and Performance Obligations

The Company disaggregates revenue from contracts with customers by reportable segment and product line and by the timing of when goods and services are transferred. See Note 12, "Segment Information" for information regarding our revenue disaggregation by reportable segment and product line.

The following table presents information regarding revenues disaggregated by the timing of when goods and services are transferred (in thousands):

	Three Months Ended February 28,				Six Months Ended February 28,
	2022		2021		2022		2021
Revenues recognized at point in time	$	104,919	$	90,726	$	205,092	$	177,506
Revenues recognized over time	31,680		29,928		62,410		62,578
Total	$	136,599	$	120,654	$	267,502	$	240,084

Contract Balances

The Company's contract assets and liabilities are as follows (in thousands):

	February 28, 2022		August 31, 2021
Receivables, which are included in accounts receivable, net	$	113,460	$	103,233
Contract assets, which are included in other current assets	2,965		8,551
Contract liabilities, which are included in other current liabilities	3,653		3,410

Receivables: The Company performs its obligations under a contract with a customer by transferring goods or services in exchange for consideration from the customer. The Company typically invoices its customers as soon as control of an asset is transferred and a receivable for the Company is established. Accounts receivable, net is recorded at face amount of customer receivables less an allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts for expected losses as a result of customers’ inability to make required payments. Management evaluates the aging of customer receivable balances, the financial condition of its customers, historical trends and the time outstanding of specific balances to estimate the amount of receivables that may not be collected in the future and records the appropriate provision. The allowance for doubtful accounts was $7.4 million and $4.2 million at February 28, 2022 and August 31, 2021, respectively. As indicated in the "Concentration of Credit Risk" section below, the Company continues to negotiate terms to secure payment with an agent whose continued payment delinquency has created a concentration of credit risk. The Company recorded through bad debt expense (included in "Selling, general and administrative expenses" in the Condensed Consolidated Statements of Operations) an additional reserve of $2.4 million in the three months ended February 28, 2022 based on the updated consideration of the factors listed below. The allowance for doubtful accounts for this particular agent as of February 28, 2022 represents management's best estimate of the amount probable of collection and considers various factors with respect to this matter, including, but not limited to, (i) the lack of payment by the agent in the nine-month period ended February 28, 2022, (ii) our due diligence on balances due to the agent from its end customers related to sales of our services and products and the known markup on those sales from the agent to end customer, (iii) the status of ongoing negotiations with the agent to secure payments and (iv) legal recourse available to secure payment. Actual collections from the agent may differ from the Company's estimate.

Contract Assets: Contract assets relate to the Company’s rights to consideration for work completed but not billed as of the reporting date on contracts with customers. The contract assets are transferred to receivables when the rights become unconditional. The Company has contract assets on contracts that are generally long-term and have revenues that are recognized over time.

Contract Liabilities: As of February 28, 2022, the Company had certain contracts where there were unsatisfied performance obligations and the Company had received cash consideration from customers before the performance obligations were satisfied. The majority of these contracts relate to longer term customer contracts (project durations of greater than three months) and are recognized over time. The Company estimates that the $3.7 million will be recognized in net sales from satisfying those performance obligations within the next twelve months, with an immaterial amount recognized in periods after.

Concentration of Credit Risk: The Company sells products and services through distributors and agents. In certain jurisdictions, those third parties represent a significant portion of our sales in their respective country which can pose a concentration of credit risk if these larger distributors or agents are not timely in their payments. As of February 28, 2022, the Company was exposed to a concentration of credit risk as a result of the continued payment delinquency of one of our agents with whom we continue to negotiate a plan to secure payments. This agent's accounts receivable, prior to consideration of the allowance for doubtful accounts, represent 10.2% of the Company's outstanding accounts receivable.

Timing of Performance Obligations Satisfied at a Point in Time: The Company evaluates when the customer obtains control of the product based on shipping terms, as control will transfer, depending upon such terms, at different points between the Company's manufacturing facility or warehouse and the customer’s location. The Company considers control to have transferred upon shipment or delivery because (i) the Company has a present right to payment at that time; (ii) the legal title has been transferred to the customer; (iii) the Company has transferred physical possession of the product to the customer; and (iv) the customer has significant risks and rewards of ownership of the product.

Variable Consideration: The Company estimates whether it will be subject to variable consideration under the terms of the contract and includes its estimate of variable consideration in the transaction price based on the expected value method when it is deemed probable of being realized based on historical experience and trends. Types of variable consideration may include rebates, incentives and discounts, among others, which are recorded as a reduction to net sales at the time when control of a performance obligation is transferred to the customer.

Practical Expedients & Exemptions: The Company elected to expense the incremental cost to obtaining a contract when the amortization period for such contracts would be one year or less. The Company does not disclose the value of unperformed obligations for (i) contracts with an original expected length of one year or less and    (ii) contracts for which it recognizes revenue at the amount to which it has the right to invoice for services performed.

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Restructuring Charges (Notes)

6 Months Ended

Feb. 28, 2022

Restructuring and Related Activities [Abstract]

Restructuring and Related Activities Disclosure [Text Block]

Note 3. Restructuring Charges

The Company has undertaken or committed to various restructuring initiatives, including workforce reductions, leadership changes, plant consolidations to reduce manufacturing overhead, satellite office closures, the continued movement of production and product sourcing to low-cost alternatives and the centralization and standardization of certain administrative functions. Liabilities for severance are generally to be paid within twelve months, while future lease payments related to facilities vacated as a result of restructuring are to be paid over the underlying remaining lease terms. During fiscal 2019, the Company announced a restructuring plan focused on (i) the integration of the Enerpac and Hydratight businesses (IT&S segment), (ii) the strategic exit of certain commodity-type services in our North America Services operations (IT&S segment) and (iii) driving efficiencies within the overall corporate structure. In the third quarter of fiscal 2020, the Company announced the expansion and revision of this plan, which further simplified and flattened the corporate structure through elimination of redundancies between the segment and corporate functions, while enhancing our commercial and marketing processes to become even closer to our customers. Upon assessment of the the Company's operating structure by the Company's new President & Chief Executive Officer (hired effective October 2021), the Company recorded $1.9 million and $4.6 million of charges in the three and six months ended February 28, 2022 in order to further simplify and streamline the organizational structure. Restructuring charges associated with expansion of the fiscal 2019 plan were $0.6 million and $0.7 million in the three and six months ended February 28, 2021.

The following summarizes restructuring reserve activity (which for the six months ended February 28, 2022 excludes $0.8 million and $0.5 million of charges for IT&S and Corporate, respectively, and for the six months ended February 28, 2021 excludes less than $0.1 million of charges for IT&S, associated with the accelerated vesting of equity awards which has no impact on the restructuring reserve) for the IT&S segment and Corporate (in thousands):

	Six Months Ended February 28, 2022
	IT&S		Corporate
Balance as of August 31, 2021	$	1,737	$	26
Restructuring charges	2,271		1,000
Cash payments	(2,555)		(995)
Impact of changes in foreign currency rates	(37)		—
Balance as of February 28, 2022	$	1,416	$	31

	Six Months Ended February 28, 2021
	IT&S		Corporate
Balance as of August 31, 2020	$	1,443	$	267
Restructuring charges	674		9
Cash payments	(1,107)		(250)
Impact of changes in foreign currency rates	15		—
Balance as of February 28, 2021	$	1,025	$	26

Total restructuring charges (inclusive of the Other segment) were $1.8 million and $4.6 million in the three and six months ended February 28, 2022, respectively, and $0.6 million and $0.9 million in the three and six months ended February 28, 2021, respectively, being reported in "Restructuring charges."

There were no restructuring charges related to Cortland U.S. (Other segment) in three and six months ended February 28, 2022. Restructuring expenses for Cortland U.S. were less than $0.1 million and $0.2 million in the three and six months ended February 28, 2021, respectively. Restructuring reserves for Cortland U.S. were $0.1 million as of February 28, 2022 and August 31, 2021, respectively.

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Discontinued Operations & Other Divestiture Charges Discontinued Operations & Divestiture Activities (Notes)

6 Months Ended

Feb. 28, 2022

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

Note 4. Discontinued Operations

On October 31, 2019, as part of our overall strategy to become a pure-play industrial tools and services company, the Company completed the sale of the businesses comprising its former Engineered Components & Systems ("EC&S") segment. This divestiture was considered part of our strategic shift to become a pure-play industrial tools and services company, and therefore, the results of operations are recorded as a component of "Loss from discontinued operations, net of income taxes" in the Condensed Consolidated Statements of Operations for all periods presented. A component of the purchase price was payable in four quarterly installments of which the final $0.7 million was received in the six months ended February 28, 2021 (this final payment was received greater than one year from the divestiture date and, as such, is reflected in "Cash provided by financing activities - discontinued operations" within the Condensed Consolidated Statements of Cash Flows). All other discontinued operations activity included within the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Cash Flows for the periods presented relate to impacts from certain retained liabilities.

The following represents the detail of "Loss from discontinued operations, net of income taxes" within the Condensed Consolidated Statements of Operations (in thousands) :

	Three Months Ended February 28,				Six Months Ended February 28,
	2022		2021		2022		2021
Selling, general and administrative expenses	$	1,157	$	559	$	1,661	$	854
Operating loss	(1,157)		(559)		(1,661)		(854)
Other loss, net	—		—		—		—
Loss before income tax benefit	(1,157)		(559)		(1,661)		(854)
Income tax benefit	(257)		(157)		(364)		(228)
Loss from discontinued operations, net of income taxes	$	(900)	$	(402)	$	(1,297)	$	(626)

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Goodwill and Other Intangible Assets

6 Months Ended

Feb. 28, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Note 5. Goodwill, Intangible Assets and Long-Lived Assets

Changes in the gross carrying value of goodwill and intangible assets result from changes in foreign currency exchange rates, business acquisitions, divestitures and impairment charges. The changes in the carrying amount of goodwill for the six months ended February 28, 2022 are as follows (in thousands):

	IT&S		Other		Total
Balance as of August 31, 2021	$	265,087	$	12,506	$	277,593
Impact of changes in foreign currency rates	(4,156)		—		(4,156)
Balance as of February 28, 2022	$	260,931	$	12,506	$	273,437

The gross carrying value and accumulated amortization of the Company’s intangible assets are as follows (in thousands):

		February 28, 2022						August 31, 2021
	Weighted Average Amortization Period (Years)	Gross Carrying Value		Accumulated Amortization		Net Book Value		Gross Carrying Value		Accumulated Amortization		Net Book Value
Amortizable intangible assets:
Customer relationships	14	$	140,661	$	117,743	$	22,918	$	142,453	$	114,463	$	27,990
Patents	11	14,289		13,553		736		14,492		13,688		804
Trademarks and tradenames	12	3,263		2,408		855		3,307		2,391		916
Indefinite lived intangible assets:
Tradenames	N/A	24,099		—		24,099		24,835		—		24,835
		$	182,312	$	133,704	$	48,608	$	185,087	$	130,542	$	54,545

The Company estimates that amortization expense will be $3.4 million for the remaining six months of fiscal 2022. Amortization expense for future years is estimated to be: $5.5 million in fiscal 2023, $3.9 million in fiscal 2024, $3.3 million in fiscal 2025, $2.0 million in fiscal 2026, $1.9 million in fiscal 2027 and $4.5 million cumulatively thereafter. The future amortization expense amounts represent estimates and may be impacted by future acquisitions, divestitures, or changes in foreign currency exchange rates, among other causes.

In the three months ended February 28, 2022, the Company recorded "Impairment & divestiture charges" of $1.1 million; $0.8 million related to a customer relationship intangible asset whereby the Company no longer intends to operate in the country associated with said customers and $0.3 million associated with an indefinite lived tradename intangible asset on a secondary brand whereby the Company plans to sunset its use over the remainder of the fiscal year.

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Product Warranty Costs

6 Months Ended

Feb. 28, 2022

Guarantees [Abstract]

Product Warranty Costs

Note 6. Product Warranty Costs

The Company generally offers its customers an assurance warranty on products sold, although warranty periods may vary by product type and application. The reserve for future warranty claims, which is recorded within the "Other current liabilities" line in the Condensed Consolidated Balance Sheets, is based on historical claim rates and current warranty cost experience. The following summarizes the changes in product warranty reserves for the six months ended February 28, 2022 and 2021, respectively (in thousands):

	Six Months Ended February 28,
	2022		2021
Beginning balance	$	1,300	$	892
Provision for warranties	627		704
Warranty payments and costs incurred	(296)		(609)
Impact of changes in foreign currency rates	(33)		18
Ending balance	$	1,598	$	1,005

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Debt

6 Months Ended

Feb. 28, 2022

Debt Disclosure [Abstract]

Debt

Note 7. Debt

The following is a summary of the Company’s long-term indebtedness (in thousands):

	February 28, 2022		August 31, 2021
Senior Credit Facility
Revolver	$	175,000	$	175,000
Total long-term debt, less current maturities	$	175,000	$	175,000

Senior Credit Facility

In March 2019, the Company entered into a senior credit facility (the “Senior Credit Facility”) with a syndicate of banks, to among other things, (i) expand the multi-currency revolving line of credit from $300 million to $400 million, (ii) extend the maturity of the Company's Senior Credit Facility from May 2020 to March 2024 (no required principal payments prior to maturity) and (iii) modify certain other provisions of the credit agreement including a reduction in pricing. The Senior Credit Facility was initially comprised of a $400 million revolving line of credit and a $200 million term loan.

At February 28, 2022, there was $175.0 million of borrowings under the revolving line of credit and $219.4 million of available borrowing capacity under the revolving line of credit after reduction for $5.6 million of outstanding letters of credit issued under the Senior Credit Facility.

The Senior Credit Facility also provides the option for future expansion, subject to certain conditions, through a $300 million accordion and/or a $200 million incremental term loan. Borrowings under the Senior Credit Facility bear interest at a variable rate based on LIBOR or a base rate, ranging from 1.125% to 2.00% in the case of loans bearing interest at LIBOR and from 0.125% to 1.00% in the case of loans bearing interest at the base rate. In addition, a non-use fee is payable quarterly on the average unused amount of the revolving line of credit ranging from 0.15% to 0.3% per annum, based on the Company's net leverage.

The Senior Credit Facility contains two financial covenants, which are a maximum leverage ratio of 3.75:1 and a minimum interest coverage ratio of 3.5:1. Certain transactions lead to adjustments to the underlying ratios, including an increase to the leverage ratio from 3.75 to 4.25 during the four fiscal quarters after a significant acquisition.

The Company was in compliance with all financial covenants at February 28, 2022. Borrowings under the Senior Credit Facility are secured by substantially all personal property assets of the Company and its domestic subsidiary guarantors and certain equity interests owned by the foreign law pledgors.

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Fair Value Measurement

6 Months Ended

Feb. 28, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurement

Note 8. Fair Value Measurements

The Company assesses the inputs used to measure the fair value of financial assets and liabilities using a three-tier hierarchy. Level 1 inputs include unadjusted quoted prices for identical instruments and are the most observable. Level 2 inputs include quoted prices for similar assets and observable inputs such as interest rates, foreign currency exchange rates, commodity rates and yield curves. Level 3 inputs are not observable in the market and include management’s own judgments about the assumptions market participants would use in pricing an asset or liability.

The fair value of the Company’s cash and cash equivalents, accounts receivable, accounts payable and variable rate long-term debt approximated book value at both February 28, 2022 and August 31, 2021 due to their short-term nature and/or the fact that the interest rates approximated market rates. Foreign currency exchange contracts and interest rate swaps are recorded at fair value. The fair value of the Company's foreign currency exchange contracts was a net liability of less than $0.1 million at both February 28, 2022 and August 31, 2021. The fair value of the foreign currency exchange and interest rate swap contracts were based on quoted inactive market prices and therefore classified as Level 2 within the valuation hierarchy.

As discussed in Note 5, “Goodwill, Intangible Assets and Long-Lived Assets”, the Company recorded impairments to a customer relationship intangible asset and an indefinite lived tradename intangible asset in the three months ended February 28, 2022. The fair value of the customer relationship and tradename impaired were determined utilizing generally accepted valuation techniques, specifically, forecasting future revenues and/or using a market royalty rate. These valuations represent Level 3 assets measured at fair value on a nonrecurring basis.

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Derivatives

6 Months Ended

Feb. 28, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Fair Value [Text Block]

Note 9. Derivatives

All derivatives are recognized in the balance sheet at their estimated fair value. The Company does not enter into derivatives for speculative purposes. Changes in the fair value of derivatives (not designated as hedges) are recorded in earnings along with the gain or loss on the hedged asset or liability.

The Company is exposed to market risk for changes in foreign currency exchange rates due to the global nature of its operations. In order to manage this risk, the Company utilizes foreign currency exchange contracts to reduce the exchange rate risk associated with recognized non-functional currency balances. The effects of changes in exchange rates are reflected concurrently in earnings for both the fair value of the foreign currency exchange contracts and the related non-functional currency asset or liability. These derivative gains and losses offset foreign currency gains and losses from the related revaluation of non-functional currency assets and liabilities (amounts included in "Other (income) expense" in the Condensed Consolidated Statements of Operations). The U.S. dollar equivalent notional value of these short duration foreign currency exchange contracts was $19.6 million and $16.0 million at February 28, 2022 and August 31, 2021, respectively. The fair value of outstanding foreign currency exchange contracts was a net liability of less than $0.1 million at both February 28, 2022 and August 31, 2021. Net foreign currency gain (loss) (included in "Other (income) expense" in the Condensed Consolidated Statements of Operations) related to these derivative instruments were as follows (in thousands):

	Three Months Ended February 28,				Six Months Ended February 28,
	2022		2021		2022		2021
Foreign currency gain (loss), net	$	54	$	109	$	(128)	$	61

The Company was a fixed-rate payor on an interest rate swap contract that fixed the LIBOR-based index used to determine the interest rates charged on a total of $100.0 million of the Company's LIBOR-based variable rate borrowings on the revolving line of credit. The contract carried a fixed rate of 0.259% and expired in August 2021. The swap agreement qualified as a hedging instrument and was designated as a cash flow hedge of forecasted LIBOR-based interest payments. The change in the fair value of the interest rate swap, a gain of less than $0.1 million in both the three and six months ended February 28, 2021 was recorded in other comprehensive income (loss).

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Capital Stock and Share Repurchase

6 Months Ended

Feb. 28, 2022

Earnings Per Share [Abstract]

Capital Stock and Share Repurchase

Note 10. Earnings per Share and Shareholders' Equity

The Company's Board of Directors has authorized the repurchase of shares of the Company's common stock under publicly announced share repurchase programs. Since the inception of the initial share repurchase program in fiscal 2012, the Company has repurchased 22,799,230 shares of common stock for $667.7 million. As of February 28, 2022, the maximum number of shares that may yet be purchased under the programs is 5,200,770 shares. The Company suspended the share repurchase program in response to the COVID-19 pandemic in the third quarter of fiscal 2020 and, accordingly, did not repurchase shares in either of the six months ended February 28, 2022 or 2021. As the Company again considers strategic share repurchases, the Company's Board of Directors, in March 2022, rescinded its prior share repurchase authorization and authorized the repurchase of a total of 10,000,000 shares.

The reconciliation between basic and diluted earnings per share is as follows (in thousands, except per share amounts):

	Three Months Ended February 28,				Six Months Ended February 28,
	2022		2021		2022		2021
Numerator:
Net earnings from continuing operations	$	2,121	$	3,584	$	5,306	$	8,406
Net loss from discontinued operations	(900)		(402)		(1,297)		(626)
Net earnings	$	1,221	$	3,182	4,009		7,780
Denominator:
Weighted average common shares outstanding - basic	60,387		59,938		60,324		59,874
Net effect of dilutive securities - stock based compensation plans	302		331		331		306
Weighted average common shares outstanding - diluted	60,689		60,269		60,655		60,180
Earnings per common share from continuing operations:
Basic	$	0.04	$	0.06	$	0.09	$	0.14
Diluted	$	0.03	$	0.06	$	0.09	$	0.14
Loss per common share from discontinued operations:
Basic	$	(0.01)	$	(0.01)	$	(0.02)	$	(0.01)
Diluted	$	(0.01)	$	(0.01)	$	(0.02)	$	(0.01)
Earnings per common share:*
Basic	$	0.02	$	0.05	$	0.07	$	0.13
Diluted	$	0.02	$	0.05	$	0.07	$	0.13
Anti-dilutive securities from stock based compensation plans (excluded from earnings per share calculation)	1,037		932		941		1,211
*The total of Earnings per share from continuing operations and Loss per share from discontinued operations may not equal Earnings per share due to rounding.

The following table illustrates the changes in the balances of each component of shareholders' equity for the three months ended February 28, 2022 (in thousands):

	Common Stock			Additional Paid-in Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Stock Held in Trust		Deferred Compensation Liability		Total Shareholders’ Equity
	Issued Shares	Amount
Balance at November 31, 2021	83,092	$	16,622	$	207,817	$	(667,732)	$	956,127	$	(103,028)	$	(3,092)	$	3,092	$	409,806
Net earnings	—	—		—		—		1,221		—		—		—		1,221
Other comprehensive income, net of tax	—	—		—		—		—		1,744		—		—		1,744
Stock contribution to employee benefit plans and other	5	1		64		—		—		—		—		—		65
Vesting of equity awards	247	46		(46)		—		—		—		—		—		—
Stock based compensation expense	—	—		2,142		—		—		—		—		—		2,142
Stock option exercises	—	—		—		—		—		—		—		—		—
Tax effect related to net share settlement of equity awards	—	—		(1,980)		—		—		—		—		—		(1,980)
Stock issued to, acquired for and distributed from rabbi trust	1	—		25		—		—		—		3		(3)		25
Balance at February 28, 2022	83,345	$	16,669	$	208,022	$	(667,732)	$	957,348	$	(101,284)	$	(3,089)	$	3,089	$	413,023

The following table illustrates the changes in the balances of each component of shareholders' equity for the three months ended February 28, 2021 (in thousands):

	Common Stock			Additional Paid-in Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Stock Held in Trust		Deferred Compensation Liability		Total Shareholders’ Equity
	Issued Shares	Amount
Balance at November 30, 2020	82,625	$	16,525	$	195,979	$	(667,732)	$	922,269	$	(99,095)	$	(2,643)	$	2,643	$	367,946
Net earnings	—	—		—		—		3,182		—		—		—		3,182
Other comprehensive income, net of tax	—	—		—		—		—		9,157		—		—		9,157
Stock contribution to employee benefit plans and other	4	1		80		—		—		—		—		—		81
Vesting of equity awards	235	47		(47)		—		—		—		—		—		—
Stock based compensation expense	—	—		2,647		—		—		—		—		—		2,647
Tax effect related to net share settlement of equity awards	—	—		(1,706)		—		—		—		—		—		(1,706)
Stock issued to, acquired for and distributed from rabbi trust	15	3		83		—		—		—		(353)		353		86
Balance at February 28, 2021	82,879	$	16,576	$	197,036	$	(667,732)	$	925,451	$	(89,938)	$	(2,996)	$	2,996	$	381,393

The following table illustrates the changes in the balances of each component of shareholders' equity for the six months ended February 28, 2022 (in thousands):

	Common Stock			Additional Paid-in Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Stock Held in Trust		Deferred Compensation Liability		Total Shareholders’ Equity
	Issued Shares	Amount
Balance at August 31, 2021	83,022	$	16,604	$	202,971	$	(667,732)	$	953,339	$	(92,984)	$	(3,067)	$	3,067	$	412,198
Net earnings	—	—		—		—		4,009		—		—		—		4,009
Other comprehensive loss, net of tax	—	—		—		—		—		(8,300)		—		—		(8,300)
Stock contribution to employee benefit plans and other	7	2		148		—		—		—		—		—		150
Vesting of equity awards	314	63		(63)		—		—		—		—		—		—
Stock based compensation expense	—	—		8,289		—		—		—		—		—		8,289
Tax effect related to net share settlement of equity awards	—	—		(3,373)		—		—		—		—		—		(3,373)
Stock issued to, acquired for and distributed from rabbi trust	2	—		50		—		—		—		(22)		22		50
Balance at February 28, 2022	83,345	$	16,669	$	208,022	$	(667,732)	$	957,348	$	(101,284)	$	(3,089)	$	3,089	$	413,023

The following table illustrates the changes in the balances of each component of shareholders' equity for the six months ended February 28, 2021 (in thousands):

	Common Stock			Additional Paid-in Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Stock Held in Trust		Deferred Compensation Liability		Total Shareholders’ Equity
	Issued Shares	Amount
Balance at August 31, 2020	82,594	$	16,519	$	193,492	$	(667,732)	$	917,671	$	(100,724)	$	(2,562)	$	2,562	$	359,226
Net earnings	—	—		—		—		7,780		—		—		—		7,780
Other comprehensive income, net of tax	—	—		—		—		—		10,786		—		—		10,786
Stock contribution to employee benefit plans and other	10	2		180		—		—		—		—		—		182
Vesting of equity awards	255	51		(51)		—		—		—		—		—		—
Stock based compensation expense	—	—		5,227		—		—		—		—		—		5,227
Tax effect related to net share settlement of equity awards	—	—		(1,981)		—		—		—		—		—		(1,981)
Stock issued to, acquired for and distributed from rabbi trust	20	4		169		—		—		—		(434)		434		173
Balance at February 28, 2021	82,879	$	16,576	$	197,036	$	(667,732)	$	925,451	$	(89,938)	$	(2,996)	$	2,996	$	381,393

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Income Taxes

6 Months Ended

Feb. 28, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Note 11. Income Taxes

The Company's global operations, acquisition activity (as applicable) and specific tax attributes provide opportunities for continuous global tax planning initiatives to maximize tax credits and deductions. Comparative earnings before income taxes, income tax expense and effective income tax rates from continuing operations are as follows (dollars in thousands):

	Three Months Ended February 28,						Six Months Ended February 28,
	2022			2021			2022			2021
Earnings from continuing operations before income tax expense	$	3,458		$	3,585		$	8,424		$	10,664
Income tax expense	1,337			1			3,118			2,258
Effective income tax rate	38.7		%	0.0		%	37.0		%	21.2		%

The Company’s earnings from continuing operations before income taxes include earnings from both U.S. and foreign jurisdictions. Though most foreign tax rates are now in line with the U.S. tax rate of 21%, the annual effective tax rate is impacted by withholding taxes, losses in jurisdictions where no benefit can be realized, and various aspects of the U.S. Tax Cuts and Jobs Act, such as the Global Intangible Low-Taxed Income, Foreign-Derived Intangible Income and Base Erosion and Anti-Abuse Tax provisions.

The effective tax rate for the three months ended February 28, 2022 was 38.7%, compared to 0.0% for the comparable prior-year period. Overall, both time periods are significantly impacted by year-to-date losses and deductions in jurisdictions where no tax benefit can be realized. The lower effective tax rate for the three months ended February 28, 2021 was primarily driven by tax benefits related to stock compensation and tax planning initiatives that did not recur in the current year. Additionally, both the current and prior-year effective income tax rates include the impact of non-recurring items.

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Segment Information

6 Months Ended

Feb. 28, 2022

Segment Reporting [Abstract]

Segment Information

Note 12. Segment Information

The Company is a global manufacturer of a broad range of industrial products and solutions. The IT&S reportable segment is primarily engaged in the design, manufacture and distribution of branded hydraulic and mechanical tools and in providing services and tool rental to the industrial, maintenance, infrastructure, oil & gas, alternative energy and other markets. The Other operating segment is included for purposes of reconciliation of the respective balances below to the condensed consolidated financial statements.

The following tables summarize financial information by reportable segment and product line (in thousands):    

	Three Months Ended February 28,				Six Months Ended February 28,
	2022		2021		2022		2021
Net Sales by Reportable Segment & Product Line
IT&S Segment
Product	$	97,498	$	87,195	$	189,847	$	169,768
Service & Rental	28,442		25,544		57,406		55,146
	125,940		112,739		247,253		224,914
Other Operating Segment	10,659		7,915		20,249		15,170
	$	136,599	$	120,654	$	267,502	$	240,084
Operating Profit (Loss)
IT&S Segment	$	12,582	$	13,857	$	30,646	$	31,014
Other Operating Segment	334		(1,873)		(923)		(3,682)
General Corporate	(8,432)		(6,277)		(18,832)		(12,555)
	$	4,484	$	5,707	$	10,891	$	14,777

	February 28, 2022		August 31, 2021
Assets
IT&S Segment	$	656,199	$	641,256
Other Operating Segment	52,965		52,745
General Corporate	112,298		126,246
	$	821,462	$	820,247

In addition to the impact of changes in foreign currency exchange rates, the comparability of segment and product line information is impacted by acquisition/divestiture activities, impairment & divestiture charges, restructuring costs and related benefits. Corporate assets, which are not allocated, principally represent cash and cash equivalents, property, plant and equipment, Right of Use ("ROU") assets, capitalized debt issuance costs and deferred income taxes.

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Contingencies and Litigation

6 Months Ended

Feb. 28, 2022

Commitments and Contingencies Disclosure [Abstract]

Contingencies and Litigation

Note 13. Commitments and Contingencies

The Company had outstanding letters of credit of $9.3 million and $11.9 million at February 28, 2022 and August 31, 2021, respectively, the majority of which relate to commercial contracts and self-insured workers' compensation programs.

As part of the Company's global sourcing strategy, we have entered into agreements with certain suppliers that require the supplier to maintain minimum levels of inventory to support certain products for which we require a short lead time to fulfill customer orders. We have the ability to notify the supplier that they no longer need maintain the minimum level of inventory should we discontinue manufacturing of a product during the contract period; however, we must purchase the remaining minimum inventory levels the supplier was required to maintain within a defined period of time.

The Company is a party to various legal proceedings that have arisen in the normal course of business. These legal proceedings include regulatory matters, product liability, breaches of contract, employment, personal injury and other disputes. The Company has recorded reserves for loss contingencies based on the specific circumstances of each case. Such reserves are recorded when it is probable a loss has been incurred and can be reasonably estimated. The Company maintains a policy to exclude from such reserves an estimate of legal defense costs. In the opinion of management, resolution of these contingencies is not expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.

The Company remains contingently liable for lease payments under leases of businesses that it previously divested or spun-off in the event that such businesses are unable to fulfill their future lease payment obligations; however, the Company does not believe it is probable that it will be required to satisfy these obligations. Future minimum lease payments for these leases at February 28, 2022 were $4.5 million associated with monthly payments extending to fiscal 2025.

Additionally, in fiscal 2019, the Company provided voluntary self-disclosures to both Dutch and U.S. authorities related to sales of products and services linked to the Crimea region of Ukraine, which sales potentially violated European Union and U.S. sanctions provisions. Although the U.S. investigation closed without further implication, the Dutch investigation continued. The Dutch Investigator concluded his investigation in March 2022 and provided the results to the Public Prosecutor’s office for review. Specifically, the Investigator concluded that the sales transactions violated EU sanctions. The conclusion in the Investigator's report was consistent with the Company's understanding of what could be stated in the report and was the basis to record an expense representing the low end of a reasonable range of financial penalties the Company may incur in the six-month period ended February 28, 2021. The Company has not adjusted its estimate of financial penalties as a result of the completion of the investigation in the six-month period ended February 28, 2022. While there can be no assurance of the ultimate outcome of the matter, the Company currently believes that there will be no material adverse effect on the Company's financial position, results of operations or cash flows from this matter.

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Leases Leases

6 Months Ended

Feb. 28, 2022

Leases [Abstract]

Lessee, Operating Leases [Text Block]

Note 14. Leases

The Company has operating leases for real estate, vehicles, manufacturing equipment, IT equipment and office equipment (the Company does not have any financing leases). Our leases typically range in term from 3 to 15 years and may contain renewal options for periods up to 5 years at our discretion. Operating leases are recorded as operating lease ROU assets in “Other long-term assets” and operating lease liabilities in “Other current liabilities” and “Other long-term liabilities” of the Condensed Consolidated Balance Sheets. There have been no material changes to our operating lease ROU assets and operating lease liabilities during the six months ended February 28, 2022.

The components of lease expense were as follows (in thousands):

	Three Months Ended February 28,				Six Months Ended February 28,
	2022		2021		2022		2021
Lease Cost:
Operating lease cost	$	3,698	$	3,766	$	7,423	$	7,471
Short-term lease cost	399		397		849		810
Variable lease cost	1,110		865		2,014		1,747

Supplemental cash flow and other information related to leases were as follows (in thousands):

	Six Months Ended February 28,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	7,190	$	7,486
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	3,598		1,360

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Basis of Presentation Property, Plant and Equipment

6 Months Ended

Feb. 28, 2022

Property, Plant and Equipment [Line Items]

Property, Plant and Equipment [Table Text Block]

Property Plant and Equipment

The following is a summary of the Company's components of property, plant and equipment (in thousands):

	February 28, 2022		August 31, 2021
Land, buildings and improvements	$	16,409	$	16,617
Machinery and equipment	145,812		145,541
Gross property, plant and equipment	162,221		162,158
Less: Accumulated depreciation	(115,741)		(113,568)
Property, plant and equipment, net	$	46,480	$	48,590

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Basis of Presentation Basis of Presentation (Policies)

6 Months Ended

Feb. 28, 2022

Accounting Policies [Abstract]

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Adopted Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board ("FASB") issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this update simplify the accounting for income taxes by removing certain exceptions and amending and clarifying existing guidance. The Company adopted this guidance on September 1, 2021. The adoption did not have a material effect on our consolidated financial statements.

Recently Issued Accounting Pronouncements

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which amends ASC 805 to require an acquirer to, at the date of acquisition, recognize and measure contract assets and contract liabilities acquired in accordance with ASU 2014-9, Revenue from Contracts with Customers (Topic 606) as if the entity had originated the contracts. The guidance is effective for fiscal years beginning after December 15, 2022. The Company will adopt this guidance in the event of a business combination subsequent to the effective date of the guidance.

In March 2020, the FASB issued ASU 2020-4, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for a limited time to ease the potential burden of accounting for reference rate reform on financial reporting. This guidance applies to contracts, hedging relationships and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates. The guidance is effective beginning on March 12, 2020 through December 31, 2022. In January 2021, the FASB issued ASU 2021-01 allowing entities to apply certain aspects of ASC 848 (previously ASU 2020-4) to all derivative instruments that undergo a modification of the interest rate used for discounting, margining or contract price alignment as a result of the reference reform. The guidance is also effective through December 31, 2022. The Company has not utilized any of the optional expedients or exceptions available under this guidance. The Company will continue to assess whether this guidance is applicable throughout the effective period.

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

Accumulated Other Comprehensive Loss

The following is a summary of the Company's accumulated other comprehensive loss (in thousands):

	February 28, 2022		August 31, 2021
Foreign currency translation adjustments	$	78,847	$	69,986
Pension and other postretirement benefit plans, net of tax	22,437		22,998
Accumulated other comprehensive loss	$	101,284	$	92,984

Property, Plant and Equipment [Table Text Block]

Property Plant and Equipment

The following is a summary of the Company's components of property, plant and equipment (in thousands):

	February 28, 2022		August 31, 2021
Land, buildings and improvements	$	16,409	$	16,617
Machinery and equipment	145,812		145,541
Gross property, plant and equipment	162,221		162,158
Less: Accumulated depreciation	(115,741)		(113,568)
Property, plant and equipment, net	$	46,480	$	48,590

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Revenue Recognition Disaggregation of Revenues (Tables)

6 Months Ended

Feb. 28, 2022

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue [Table Text Block]

The following table presents information regarding revenues disaggregated by the timing of when goods and services are transferred (in thousands):

	Three Months Ended February 28,				Six Months Ended February 28,
	2022		2021		2022		2021
Revenues recognized at point in time	$	104,919	$	90,726	$	205,092	$	177,506
Revenues recognized over time	31,680		29,928		62,410		62,578
Total	$	136,599	$	120,654	$	267,502	$	240,084

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Revenue Recognition Contract with Customer, Assets and Liabilities (Tables)

6 Months Ended

Feb. 28, 2022

Revenue from Contract with Customer [Abstract]

Contract with Customer, Contract Asset, Contract Liability, and Receivable [Table Text Block]

Contract Balances

The Company's contract assets and liabilities are as follows (in thousands):

	February 28, 2022		August 31, 2021
Receivables, which are included in accounts receivable, net	$	113,460	$	103,233
Contract assets, which are included in other current assets	2,965		8,551
Contract liabilities, which are included in other current liabilities	3,653		3,410

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Restructuring Charges (Tables)

6 Months Ended

Feb. 28, 2022

Restructuring and Related Activities [Abstract]

Restructuring and Related Costs [Table Text Block]

The following summarizes restructuring reserve activity (which for the six months ended February 28, 2022 excludes $0.8 million and $0.5 million of charges for IT&S and Corporate, respectively, and for the six months ended February 28, 2021 excludes less than $0.1 million of charges for IT&S, associated with the accelerated vesting of equity awards which has no impact on the restructuring reserve) for the IT&S segment and Corporate (in thousands):

	Six Months Ended February 28, 2022
	IT&S		Corporate
Balance as of August 31, 2021	$	1,737	$	26
Restructuring charges	2,271		1,000
Cash payments	(2,555)		(995)
Impact of changes in foreign currency rates	(37)		—
Balance as of February 28, 2022	$	1,416	$	31

	Six Months Ended February 28, 2021
	IT&S		Corporate
Balance as of August 31, 2020	$	1,443	$	267
Restructuring charges	674		9
Cash payments	(1,107)		(250)
Impact of changes in foreign currency rates	15		—
Balance as of February 28, 2021	$	1,025	$	26

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Discontinued Operations & Other Divestiture Charges Discontinued Operations Balance Sheet and Statement of Operations (Tables) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2022	Feb. 28, 2021	Feb. 28, 2022	Feb. 28, 2021
Discontinued Operations and Disposal Groups [Abstract]
Net (Loss) Earnings from Discontinued Operations	$ 900	$ 402	$ 1,297	$ 626

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Discontinued Operations & Other Divestiture Charges Statement of Operations (Tables)

6 Months Ended

Feb. 28, 2022

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations [Table Text Block]

The following represents the detail of "Loss from discontinued operations, net of income taxes" within the Condensed Consolidated Statements of Operations (in thousands) :

	Three Months Ended February 28,				Six Months Ended February 28,
	2022		2021		2022		2021
Selling, general and administrative expenses	$	1,157	$	559	$	1,661	$	854
Operating loss	(1,157)		(559)		(1,661)		(854)
Other loss, net	—		—		—		—
Loss before income tax benefit	(1,157)		(559)		(1,661)		(854)
Income tax benefit	(257)		(157)		(364)		(228)
Loss from discontinued operations, net of income taxes	$	(900)	$	(402)	$	(1,297)	$	(626)

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Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Feb. 28, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The changes in the carrying amount of goodwill for the six months ended February 28, 2022 are as follows (in thousands):

	IT&S		Other		Total
Balance as of August 31, 2021	$	265,087	$	12,506	$	277,593
Impact of changes in foreign currency rates	(4,156)		—		(4,156)
Balance as of February 28, 2022	$	260,931	$	12,506	$	273,437

Schedule Of Finite Lived And Indefinite Lived Intangible Assets Table

The gross carrying value and accumulated amortization of the Company’s intangible assets are as follows (in thousands):

		February 28, 2022						August 31, 2021
	Weighted Average Amortization Period (Years)	Gross Carrying Value		Accumulated Amortization		Net Book Value		Gross Carrying Value		Accumulated Amortization		Net Book Value
Amortizable intangible assets:
Customer relationships	14	$	140,661	$	117,743	$	22,918	$	142,453	$	114,463	$	27,990
Patents	11	14,289		13,553		736		14,492		13,688		804
Trademarks and tradenames	12	3,263		2,408		855		3,307		2,391		916
Indefinite lived intangible assets:
Tradenames	N/A	24,099		—		24,099		24,835		—		24,835
		$	182,312	$	133,704	$	48,608	$	185,087	$	130,542	$	54,545

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Product Warranty Costs (Tables)

6 Months Ended

Feb. 28, 2022

Guarantees [Abstract]

Schedule of Product Warranty Liability

The following summarizes the changes in product warranty reserves for the six months ended February 28, 2022 and 2021, respectively (in thousands):

	Six Months Ended February 28,
	2022		2021
Beginning balance	$	1,300	$	892
Provision for warranties	627		704
Warranty payments and costs incurred	(296)		(609)
Impact of changes in foreign currency rates	(33)		18
Ending balance	$	1,598	$	1,005

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Debt (Tables)

6 Months Ended

Feb. 28, 2022

Debt Disclosure [Abstract]

Long-Term Indebtedness

The following is a summary of the Company’s long-term indebtedness (in thousands):

	February 28, 2022		August 31, 2021
Senior Credit Facility
Revolver	$	175,000	$	175,000
Total long-term debt, less current maturities	$	175,000	$	175,000

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Derivatives Derivatives (Tables)

6 Months Ended

Feb. 28, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments, Gain (Loss) [Table Text Block]

Net foreign currency gain (loss) (included in "Other (income) expense" in the Condensed Consolidated Statements of Operations) related to these derivative instruments were as follows (in thousands):

	Three Months Ended February 28,				Six Months Ended February 28,
	2022		2021		2022		2021
Foreign currency gain (loss), net	$	54	$	109	$	(128)	$	61

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Earnings Per Share (Tables)

6 Months Ended

Feb. 28, 2022

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The reconciliation between basic and diluted earnings per share is as follows (in thousands, except per share amounts):

	Three Months Ended February 28,				Six Months Ended February 28,
	2022		2021		2022		2021
Numerator:
Net earnings from continuing operations	$	2,121	$	3,584	$	5,306	$	8,406
Net loss from discontinued operations	(900)		(402)		(1,297)		(626)
Net earnings	$	1,221	$	3,182	4,009		7,780
Denominator:
Weighted average common shares outstanding - basic	60,387		59,938		60,324		59,874
Net effect of dilutive securities - stock based compensation plans	302		331		331		306
Weighted average common shares outstanding - diluted	60,689		60,269		60,655		60,180
Earnings per common share from continuing operations:
Basic	$	0.04	$	0.06	$	0.09	$	0.14
Diluted	$	0.03	$	0.06	$	0.09	$	0.14
Loss per common share from discontinued operations:
Basic	$	(0.01)	$	(0.01)	$	(0.02)	$	(0.01)
Diluted	$	(0.01)	$	(0.01)	$	(0.02)	$	(0.01)
Earnings per common share:*
Basic	$	0.02	$	0.05	$	0.07	$	0.13
Diluted	$	0.02	$	0.05	$	0.07	$	0.13
Anti-dilutive securities from stock based compensation plans (excluded from earnings per share calculation)	1,037		932		941		1,211
*The total of Earnings per share from continuing operations and Loss per share from discontinued operations may not equal Earnings per share due to rounding.

The following table illustrates the changes in the balances of each component of shareholders' equity for the three months ended February 28, 2022 (in thousands):

	Common Stock			Additional Paid-in Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Stock Held in Trust		Deferred Compensation Liability		Total Shareholders’ Equity
	Issued Shares	Amount
Balance at November 31, 2021	83,092	$	16,622	$	207,817	$	(667,732)	$	956,127	$	(103,028)	$	(3,092)	$	3,092	$	409,806
Net earnings	—	—		—		—		1,221		—		—		—		1,221
Other comprehensive income, net of tax	—	—		—		—		—		1,744		—		—		1,744
Stock contribution to employee benefit plans and other	5	1		64		—		—		—		—		—		65
Vesting of equity awards	247	46		(46)		—		—		—		—		—		—
Stock based compensation expense	—	—		2,142		—		—		—		—		—		2,142
Stock option exercises	—	—		—		—		—		—		—		—		—
Tax effect related to net share settlement of equity awards	—	—		(1,980)		—		—		—		—		—		(1,980)
Stock issued to, acquired for and distributed from rabbi trust	1	—		25		—		—		—		3		(3)		25
Balance at February 28, 2022	83,345	$	16,669	$	208,022	$	(667,732)	$	957,348	$	(101,284)	$	(3,089)	$	3,089	$	413,023

The following table illustrates the changes in the balances of each component of shareholders' equity for the three months ended February 28, 2021 (in thousands):

	Common Stock			Additional Paid-in Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Stock Held in Trust		Deferred Compensation Liability		Total Shareholders’ Equity
	Issued Shares	Amount
Balance at November 30, 2020	82,625	$	16,525	$	195,979	$	(667,732)	$	922,269	$	(99,095)	$	(2,643)	$	2,643	$	367,946
Net earnings	—	—		—		—		3,182		—		—		—		3,182
Other comprehensive income, net of tax	—	—		—		—		—		9,157		—		—		9,157
Stock contribution to employee benefit plans and other	4	1		80		—		—		—		—		—		81
Vesting of equity awards	235	47		(47)		—		—		—		—		—		—
Stock based compensation expense	—	—		2,647		—		—		—		—		—		2,647
Tax effect related to net share settlement of equity awards	—	—		(1,706)		—		—		—		—		—		(1,706)
Stock issued to, acquired for and distributed from rabbi trust	15	3		83		—		—		—		(353)		353		86
Balance at February 28, 2021	82,879	$	16,576	$	197,036	$	(667,732)	$	925,451	$	(89,938)	$	(2,996)	$	2,996	$	381,393

The following table illustrates the changes in the balances of each component of shareholders' equity for the six months ended February 28, 2022 (in thousands):

	Common Stock			Additional Paid-in Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Stock Held in Trust		Deferred Compensation Liability		Total Shareholders’ Equity
	Issued Shares	Amount
Balance at August 31, 2021	83,022	$	16,604	$	202,971	$	(667,732)	$	953,339	$	(92,984)	$	(3,067)	$	3,067	$	412,198
Net earnings	—	—		—		—		4,009		—		—		—		4,009
Other comprehensive loss, net of tax	—	—		—		—		—		(8,300)		—		—		(8,300)
Stock contribution to employee benefit plans and other	7	2		148		—		—		—		—		—		150
Vesting of equity awards	314	63		(63)		—		—		—		—		—		—
Stock based compensation expense	—	—		8,289		—		—		—		—		—		8,289
Tax effect related to net share settlement of equity awards	—	—		(3,373)		—		—		—		—		—		(3,373)
Stock issued to, acquired for and distributed from rabbi trust	2	—		50		—		—		—		(22)		22		50
Balance at February 28, 2022	83,345	$	16,669	$	208,022	$	(667,732)	$	957,348	$	(101,284)	$	(3,089)	$	3,089	$	413,023

The following table illustrates the changes in the balances of each component of shareholders' equity for the six months ended February 28, 2021 (in thousands):

	Common Stock			Additional Paid-in Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Stock Held in Trust		Deferred Compensation Liability		Total Shareholders’ Equity
	Issued Shares	Amount
Balance at August 31, 2020	82,594	$	16,519	$	193,492	$	(667,732)	$	917,671	$	(100,724)	$	(2,562)	$	2,562	$	359,226
Net earnings	—	—		—		—		7,780		—		—		—		7,780
Other comprehensive income, net of tax	—	—		—		—		—		10,786		—		—		10,786
Stock contribution to employee benefit plans and other	10	2		180		—		—		—		—		—		182
Vesting of equity awards	255	51		(51)		—		—		—		—		—		—
Stock based compensation expense	—	—		5,227		—		—		—		—		—		5,227
Tax effect related to net share settlement of equity awards	—	—		(1,981)		—		—		—		—		—		(1,981)
Stock issued to, acquired for and distributed from rabbi trust	20	4		169		—		—		—		(434)		434		173
Balance at February 28, 2021	82,879	$	16,576	$	197,036	$	(667,732)	$	925,451	$	(89,938)	$	(2,996)	$	2,996	$	381,393

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Income Taxes Income Taxes (Tables)

6 Months Ended

Feb. 28, 2022

Income Tax Disclosure [Abstract]

Income Tax Effective Tax Rate [Table Text Block]

Comparative earnings before income taxes, income tax expense and effective income tax rates from continuing operations are as follows (dollars in thousands):

	Three Months Ended February 28,						Six Months Ended February 28,
	2022			2021			2022			2021
Earnings from continuing operations before income tax expense	$	3,458		$	3,585		$	8,424		$	10,664
Income tax expense	1,337			1			3,118			2,258
Effective income tax rate	38.7		%	0.0		%	37.0		%	21.2		%

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Segment Information (Tables)

6 Months Ended

Feb. 28, 2022

Segment Reporting [Abstract]

Summary of Financial Information by Reportable Segment and Product Line

The following tables summarize financial information by reportable segment and product line (in thousands):    

	Three Months Ended February 28,				Six Months Ended February 28,
	2022		2021		2022		2021
Net Sales by Reportable Segment & Product Line
IT&S Segment
Product	$	97,498	$	87,195	$	189,847	$	169,768
Service & Rental	28,442		25,544		57,406		55,146
	125,940		112,739		247,253		224,914
Other Operating Segment	10,659		7,915		20,249		15,170
	$	136,599	$	120,654	$	267,502	$	240,084
Operating Profit (Loss)
IT&S Segment	$	12,582	$	13,857	$	30,646	$	31,014
Other Operating Segment	334		(1,873)		(923)		(3,682)
General Corporate	(8,432)		(6,277)		(18,832)		(12,555)
	$	4,484	$	5,707	$	10,891	$	14,777

	February 28, 2022		August 31, 2021
Assets
IT&S Segment	$	656,199	$	641,256
Other Operating Segment	52,965		52,745
General Corporate	112,298		126,246
	$	821,462	$	820,247

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Leases Components of Lease Expense (Tables)

6 Months Ended

Feb. 28, 2022

Components of Lease Expense [Abstract]

Lease, Cost [Table Text Block]

The components of lease expense were as follows (in thousands):

	Three Months Ended February 28,				Six Months Ended February 28,
	2022		2021		2022		2021
Lease Cost:
Operating lease cost	$	3,698	$	3,766	$	7,423	$	7,471
Short-term lease cost	399		397		849		810
Variable lease cost	1,110		865		2,014		1,747

XML

Leases Supplemental Cash Flow Information Related to Leases (Tables)

6 Months Ended

Feb. 28, 2022

Supplemental Cash Flow Information Related to Leases [Abstract]

Supplemental Cash Flow Information Related to Leases [Table Text Block]

Supplemental cash flow and other information related to leases were as follows (in thousands):

	Six Months Ended February 28,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	7,190	$	7,486
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	3,598		1,360

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Basis of Presentation Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Feb. 28, 2022	Aug. 31, 2021
Property, Plant and Equipment [Line Items]
Land, buildings and improvements	$ 16,409	$ 16,617
Machinery and equipment	145,812	145,541
Gross Property, Plant and Equipment	162,221	162,158
Less: Accumulated Depreciation	(115,741)	(113,568)
Property, Plant and Equipment, Net	$ 46,480	$ 48,590

XML

Basis of Presentation Basis of Presentation (Details) - USD ($) $ in Thousands	Feb. 28, 2022	Nov. 30, 2021	Aug. 31, 2021	Feb. 28, 2021	Nov. 30, 2020	Aug. 31, 2020
Condensed Statement of Income Captions [Line Items]
Foreign currency translation adjustments	$ 78,847		$ 69,986
Pension and other postretirement benefit plans, net of tax	22,437		22,998
Total shareholders’ equity	(413,023)	$ (409,806)	(412,198)	$ (381,393)	$ (367,946)	$ (359,226)
AOCI Attributable to Parent [Member]
Condensed Statement of Income Captions [Line Items]
Total shareholders’ equity	$ 101,284	$ 103,028	$ 92,984	$ 89,938	$ 99,095	$ 100,724

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Revenue Recognition Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2022	Feb. 28, 2021	Feb. 28, 2022	Feb. 28, 2021
Disaggregation of Revenue [Line Items]
Revenues	$ 136,599	$ 120,654	$ 267,502	$ 240,084
Revenue Recognized at a Point in Time [Member]
Disaggregation of Revenue [Line Items]
Revenues	104,919	90,726	205,092	177,506
Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Revenues	$ 31,680	$ 29,928	$ 62,410	$ 62,578

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Revenue Recognition Contract with Customer, Asset and Liability (Details) - USD ($) $ in Thousands	3 Months Ended
	Feb. 28, 2022	Aug. 31, 2021
Revenue from Contract with Customer [Abstract]
Accounts Receivable, Allowance for Credit Loss, Current	$ 7,400	$ 4,200
Accounts receivable, net	113,460	103,233
Contract assets	2,965	8,551
Contract liabilities	3,653	$ 3,410
Revenue, remaining performance obligation, within next twelve months	$ 3,700
Percentage of accounts receivable	10.20%
Accounts Receivable, Allowance for Credit Loss, Period Increase (Decrease)	$ 2,400

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Restructuring Charges (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2022	Feb. 28, 2021	Feb. 28, 2022	Feb. 28, 2021
Restructuring Reserve [Roll Forward]
Restructuring Charges	$ 1,832	$ 649	$ 4,569	$ 859
Industrial Tools & Services [Member] [Domain]
Restructuring Reserve [Roll Forward]
Beginning Balance			1,737	1,443
Restructuring Charges			2,271	674
Cash payments			(2,555)	(1,107)
Other non-cash uses of reserve			(800)	(100)
Impact of changes in foreign currency rates			(37)	15
Ending Balance	1,416	1,025	1,416	1,025
General Corporate
Restructuring Reserve [Roll Forward]
Beginning Balance			26	267
Restructuring Charges			1,000	9
Cash payments			(995)	(250)
Other non-cash uses of reserve			(500)
Impact of changes in foreign currency rates			0	0
Ending Balance	31	26	31	26
Reportable Segments [Member]
Restructuring Reserve [Roll Forward]
Restructuring Charges	1,900	600	4,600	700
Other Operating Segment [Member]
Restructuring Reserve [Roll Forward]
Beginning Balance			100
Restructuring Charges	0	$ 100	0	$ 200
Ending Balance	$ 100		$ 100

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Discontinued Operations & Other Divestiture Charges Discontinued Operations & Divestiture Activities (Details) - USD ($)
$ in Thousands

3 Months Ended

6 Months Ended

Oct. 31, 2019

Feb. 28, 2022

Feb. 28, 2021

Feb. 28, 2022

Feb. 28, 2021

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest

$ 3,458

$ 3,585

$ 8,424

$ 10,664

Net (Loss) Earnings from Discontinued Operations

900

402

$ 1,297

626

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

Note 4. Discontinued Operations

On October 31, 2019, as part of our overall strategy to become a pure-play industrial tools and services company, the Company completed the sale of the businesses comprising its former Engineered Components & Systems ("EC&S") segment. This divestiture was considered part of our strategic shift to become a pure-play industrial tools and services company, and therefore, the results of operations are recorded as a component of "Loss from discontinued operations, net of income taxes" in the Condensed Consolidated Statements of Operations for all periods presented. A component of the purchase price was payable in four quarterly installments of which the final $0.7 million was received in the six months ended February 28, 2021 (this final payment was received greater than one year from the divestiture date and, as such, is reflected in "Cash provided by financing activities - discontinued operations" within the Condensed Consolidated Statements of Cash Flows). All other discontinued operations activity included within the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Cash Flows for the periods presented relate to impacts from certain retained liabilities.

The following represents the detail of "Loss from discontinued operations, net of income taxes" within the Condensed Consolidated Statements of Operations (in thousands) :

	Three Months Ended February 28,				Six Months Ended February 28,
	2022		2021		2022		2021
Selling, general and administrative expenses	$	1,157	$	559	$	1,661	$	854
Operating loss	(1,157)		(559)		(1,661)		(854)
Other loss, net	—		—		—		—
Loss before income tax benefit	(1,157)		(559)		(1,661)		(854)
Income tax benefit	(257)		(157)		(364)		(228)
Loss from discontinued operations, net of income taxes	$	(900)	$	(402)	$	(1,297)	$	(626)

Engineered Components & Systems [Member]

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Quarterly Installment Payments

700

Disposal Group, Including Discontinued Operation, Operating Income (Loss)

(1,157)

(559)

$ (1,661)

(854)

Disposal Group, Including Discontinued Operation, Other Expense (Income), net

0

0

0

0

Disposal Group, Including Discontinued Operation, Loss Before Income Tax Benefit

1,157

559

1,661

854

Disposal Group, Including Discontinued Operation, General and Administrative Expense

1,157

559

1,661

854

Disposal Group, Including Discontinued Operation, Income Tax (Benefit) Expense

(257)

(157)

(364)

(228)

Net (Loss) Earnings from Discontinued Operations

$ (900)

$ (402)

$ (1,297)

$ (626)

Engineered Components & Systems [Member] [Domain]

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Disposal Date

Oct. 31, 2019

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Discontinued Operations & Other Divestiture Charges Other Divestiture Activities (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2022	Feb. 28, 2021	Feb. 28, 2022	Feb. 28, 2021
Discontinued Operations and Disposal Groups [Abstract]
Impairment & divestiture (benefits) charges	$ 1,116	$ 401	$ 1,116	$ 539

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Discontinued Operations & Other Divestiture Charges Divestitures Activities Discontinued Operations - Loss From Discontinued Operations (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2022	Feb. 28, 2021	Feb. 28, 2022	Feb. 28, 2021
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net (Loss) Earnings from Discontinued Operations	$ 900	$ 402	$ 1,297	$ 626
Engineered Components & Systems [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Including Discontinued Operation, Operating (Loss) Earnings	(1,157)	(559)	(1,661)	(854)
Disposal Group, Including Discontinued Operation, Other Expense	0	0	0	0
Disposal Group, Including Discontinued Operation, (Loss) Earnings Before Income Tax Benefit	(1,157)	(559)	(1,661)	(854)
Disposal Group, Including Discontinued Operation, Income Tax (Benefit) Expense	(257)	(157)	(364)	(228)
Net (Loss) Earnings from Discontinued Operations	$ (900)	$ (402)	$ (1,297)	$ (626)

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Changes in Carrying Value of Goodwill (Details) $ in Thousands	6 Months Ended
	Feb. 28, 2022 USD ($)
Goodwill [Roll Forward]
Ending balance	$ 277,593
Impact of changes in foreign currency rates	(4,156)
Ending balance	273,437
Industrial Tools & Services [Member] [Domain]
Goodwill [Roll Forward]
Ending balance	265,087
Impact of changes in foreign currency rates	(4,156)
Ending balance	260,931
Other Operating Segment [Member]
Goodwill [Roll Forward]
Ending balance	12,506
Impact of changes in foreign currency rates	0
Ending balance	$ 12,506

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Gross Carrying Amount and Accumulated Amortization of Other Intangible Assets (Details) - USD ($) $ in Thousands	6 Months Ended
	Feb. 28, 2022	Aug. 31, 2021
Indefinite And Finite Lived Intangible Assets [Line Items]
Accumulated Amortization	$ 133,704	$ 130,542
Gross Carrying Value	182,312	185,087
Net Book Value	48,608	54,545
Tradenames
Indefinite And Finite Lived Intangible Assets [Line Items]
Gross Carrying Value	24,099	24,835
Accumulated Amortization	0	0
Net Book Value	$ 24,099	24,835
Customer relationships
Indefinite And Finite Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Years)	14 years
Gross Carrying Value	$ 140,661	142,453
Accumulated Amortization	117,743	114,463
Net Book Value	$ 22,918	27,990
Patents
Indefinite And Finite Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Years)	11 years
Gross Carrying Value	$ 14,289	14,492
Accumulated Amortization	13,553	13,688
Net Book Value	$ 736	804
Trademarks and tradenames
Indefinite And Finite Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Years)	12 years
Gross Carrying Value	$ 3,263	3,307
Accumulated Amortization	2,408	2,391
Net Book Value	$ 855	$ 916

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Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2022	Feb. 28, 2021	Feb. 28, 2022	Feb. 28, 2021
Impaired Assets [Line Items]
Finite-Lived Intangible Asset, Expected Amortization, Year One	$ 5,500		$ 5,500
Future Amortization Expense, 2025	4,500		4,500
Future Amortization Expense, 2024	1,900		1,900
Future Amortization Expense, 2023	2,000		2,000
Future Amortization Expense, 2022	3,300		3,300
Future Amortization Expense, 2021	3,900		3,900
Impairment & divestiture (benefits) charges	1,116	$ 401	1,116	$ 539
Future Amortization Expense, Remainder of 2020	3,400		3,400
Future Amortization Expense, 2021	3,900		3,900
Future Amortization Expense, 2022	3,300		3,300
Future Amortization Expense, 2023	2,000		2,000
Future Amortization Expense, 2024	1,900		1,900
Future Amortization Expense, 2025	4,500		$ 4,500
Tradenames
Impaired Assets [Line Items]
Impairment & divestiture (benefits) charges	300
Customer relationships
Impaired Assets [Line Items]
Impairment & divestiture (benefits) charges	$ 800

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Rollforward of Accrued Product Warranty Reserve (Details) - USD ($) $ in Thousands	6 Months Ended
	Feb. 28, 2022	Feb. 28, 2021
Movement in Standard Product Warranty Accrual [Roll Forward]
Beginning balance	$ 1,300	$ 892
Provision for warranties	627	704
Warranty Payments and costs incurred	(296)	(609)
Impact of changes in foreign currency rates	(33)	18
Ending balance	$ 1,598	$ 1,005

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Long-Term Indebtedness (Details) - USD ($) $ in Thousands	Feb. 28, 2022	Aug. 31, 2021
Debt Instrument [Line Items]
Long-term debt, net	$ 175,000	$ 175,000
Line of Credit | Senior Credit Facility - Revolver
Debt Instrument [Line Items]
Long-term Debt	$ 175,000	$ 175,000

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Debt - Additional Information (Details) $ in Thousands	3 Months Ended	6 Months Ended
	Feb. 28, 2022 USD ($)	Feb. 28, 2022 USD ($)	Feb. 28, 2021 USD ($)	Aug. 31, 2021 USD ($)	Nov. 30, 2020 USD ($)
Debt Instrument [Line Items]
Borrowings on Revolving Credit		$ 15,000	$ 10,000
Outstanding letters of credit	$ 9,300	9,300		$ 11,900
Revolving Credit Facility
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	400,000	400,000			$ 300,000
Outstanding letters of credit	5,600	5,600
Senior Credit Facility - Term Loan
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	200,000	200,000
Senior Credit Facility - Revolver
Debt Instrument [Line Items]
Borrowings on Revolving Credit		175,000
Line of Credit | Senior Credit Facility - Revolver
Debt Instrument [Line Items]
Unused credit line Available for Borrowing, Amount	$ 219,400	$ 219,400
Minimum
Debt Instrument [Line Items]
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.15%
Fixed Charge Coverage Ratio	3.5	3.5
Minimum | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.125%
Minimum | Base Rate
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.00%
Maximum
Debt Instrument [Line Items]
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.30%
Leverage ratio	3.75	3.75
Adjusted Leverage Ratio	4.25	4.25
Maximum | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	2.00%
Maximum | Base Rate
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	0.125%
Accordion [Domain]
Debt Instrument [Line Items]
Senior credit facility expansion option, available	$ 300,000	$ 300,000
Incremental Term Loan [Domain]
Debt Instrument [Line Items]
Senior credit facility expansion option, available	$ 200,000	$ 200,000

XML

Fair Value Measurement - Additional Information (Details) - USD ($) $ in Millions	Feb. 28, 2022	Aug. 31, 2021
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign Currency Contract, Liability/Asset, Fair Value Disclosure	$ (0.1)	$ (0.1)

XML

Derivatives Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2022	Feb. 28, 2021	Feb. 28, 2022	Feb. 28, 2021	Aug. 31, 2021
Derivative [Line Items]
Foreign Currency Contract, Liability/Asset, Fair Value Disclosure	$ (100)		$ (100)		$ (100)
Loss on Foreign Currency Fair Value Hedge Derivatives and Not Designated as Hedging Instruments at Fair Value	54	$ 109	(128)	$ 61
London Interbank Offered Rate (LIBOR)
Derivative [Line Items]
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months		$ 100		$ 100
Fair Value Hedging [Member]
Derivative [Line Items]
Derivative, Fair Value, Net	$ 19,600		$ 19,600		16,000
Interest Rate Swap [Member] | London Interbank Offered Rate (LIBOR)
Derivative [Line Items]
Derivative, Amount of Hedged Item					$ 100,000
Derivative, Fixed Interest Rate					0.259%

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Earnings per Share and Shareholders' Equity Share Repurchase (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		126 Months Ended
	Feb. 28, 2022	Feb. 28, 2021	Feb. 28, 2022	Feb. 28, 2021	Feb. 28, 2022	Nov. 30, 2021	Aug. 31, 2021	Nov. 30, 2020	Aug. 31, 2020
Equity [Abstract]
Treasury Stock, Shares	22,799,230		22,799,230		22,799,230		22,799,230
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased	5,200,770		5,200,770		5,200,770
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ 413,023	$ 381,393	$ 413,023	$ 381,393	$ 413,023	$ 409,806	$ 412,198	$ 367,946	$ 359,226
Net (loss) earnings	1,221	3,182	4,009	7,780
Other Comprehensive (Loss) Income, Net of Tax	1,744	9,157	(8,300)	10,786
Stock Issued During Period, Value, Employee Benefit Plan	65	81	150	182
Stock Issued During Period, Value, Restricted Stock Award, Gross	0	0	0	0
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	2,142	2,647	8,289	5,227
Adjustments to Additional Paid in Capital, Income Tax Benefit from Share-based Compensation	(1,980)	(1,706)	(3,373)	(1,981)
Stock Value Issued to Acquired For and Distributed From Rabbi Trust	25	$ 86	50	$ 173
Retained earnings	957,348		957,348		957,348		953,339
Treasury Stock, Value	$ 667,732		$ 667,732		667,732		$ 667,732
Treasury Stock, Value, Acquired, Cost Method					$ 667,700
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased	5,200,770		5,200,770		5,200,770
Stock Repurchase Program, Number of Shares Authorized to be Repurchased	10,000,000		10,000,000		10,000,000
Common Stock [Member]
Stock Issued During Period, Shares, New Issues	83,345,000	82,879,000	83,345,000	82,879,000	83,345,000	83,092,000	83,022,000	82,625,000	82,594,000
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ 16,669	$ 16,576	$ 16,669	$ 16,576	$ 16,669	$ 16,622	$ 16,604	$ 16,525	$ 16,519
Stock Issued During Period, Shares, Employee Benefit Plan	5,000	4,000	7,000	10,000
Stock Issued During Period, Value, Employee Benefit Plan	$ 1	$ 1	$ 2	$ 2
Stock Issued During Period, Shares, Restricted Stock Award, Gross	247,000	235,000	314,000	255,000
Stock Issued During Period, Value, Restricted Stock Award, Gross	$ 46	$ 47	$ 63	$ 51
Stock Issued To Acquired For And Distributed From Rabbi Trust	1,000	15,000	2,000	20,000
Stock Value Issued to Acquired For and Distributed From Rabbi Trust	$ 0	$ 3		$ 4
Additional Paid-in Capital [Member]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	208,022	197,036	$ 208,022	197,036	208,022	207,817	202,971	195,979	193,492
Stock Issued During Period, Value, Employee Benefit Plan	64	80	148	180
Stock Issued During Period, Value, Restricted Stock Award, Gross	(46)	(47)	(63)	(51)
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	2,142	2,647	8,289	5,227
Adjustments to Additional Paid in Capital, Income Tax Benefit from Share-based Compensation	(1,980)	(1,706)	(3,373)	(1,981)
Stock Value Issued to Acquired For and Distributed From Rabbi Trust	25	83	50	169
Treasury Stock [Member]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	(667,732)	(667,732)	(667,732)	(667,732)	(667,732)	(667,732)	(667,732)	(667,732)	(667,732)
Retained Earnings [Member]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	957,348	925,451	957,348	925,451	957,348	956,127	953,339	922,269	917,671
Net (loss) earnings	1,221	3,182	4,009	7,780
AOCI Attributable to Parent [Member]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	(101,284)	(89,938)	(101,284)	(89,938)	(101,284)	(103,028)	(92,984)	(99,095)	(100,724)
Other Comprehensive (Loss) Income, Net of Tax	1,744	9,157	(8,300)	10,786
Stock held in trust [member] [Member]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	(3,089)	(2,996)	(3,089)	(2,996)	(3,089)	(3,092)	(3,067)	(2,643)	(2,562)
Stock Value Issued to Acquired For and Distributed From Rabbi Trust	3	(353)	(22)	(434)
Deferred Compensation, Share-based Payments [Member]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	3,089	2,996	3,089	2,996	$ 3,089	$ 3,092	$ 3,067	$ 2,643	$ 2,562
Stock Value Issued to Acquired For and Distributed From Rabbi Trust	$ (3)	$ 353	$ 22	$ 434

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Capital Stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2022	Feb. 28, 2021	Feb. 28, 2022	Feb. 28, 2021
Earnings Per Share [Abstract]
Net (Loss) Earnings from Continuing Operations	$ 2,121	$ 3,584	$ 5,306	$ 8,406
Net (Loss) Earnings from Discontinued Operations	(900)	(402)	(1,297)	(626)
Net (loss) earnings	$ 1,221	$ 3,182	$ 4,009	$ 7,780
Weighted average common shares outstanding - basic	60,387	59,938	60,324	59,874
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements	302	331	331	306
Weighted Average Common Shares outstanding - diluted	60,689	60,269	60,655	60,180
(Loss) Earnings per share from Continuing Operations, Per Basic Share	$ 0.04	$ 0.06	$ 0.09	$ 0.14
(Loss) Earnings per share from Continuing Operations, Per Diluted Share	0.03	0.06	0.09	0.14
(Loss) Earnings per share from Discontinued Operations, Per Basic Shares	(0.01)	(0.01)	(0.02)	(0.01)
(Loss) Earnings per share from Discontinued Operations, Per Diluted Share	(0.01)	(0.01)	(0.02)	(0.01)
Earnings Per Share, Basic	0.02	0.05	0.07	0.13
(Loss) Earnings Per Share, Diluted	$ 0.02	$ 0.05	$ 0.07	$ 0.13
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities from stock based compensation plans (excluded from earnings per share calculation)	1,037	932	941	1,211

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Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2022	Feb. 28, 2021	Feb. 28, 2022	Feb. 28, 2021
Income Tax Disclosure Additional Details [Table] [Line Items]
Income tax (benefit) expense	$ 1,337	$ 1	$ 3,118	$ 2,258
Effective Income Tax Rate Reconciliation, Percent	38.70%	0.00%	37.00%	21.20%
Federal Statutory Income Tax Rate, Percent			21.00%

XML

Summary of Financial Information by Reportable Segment and Product Line (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2022	Feb. 28, 2021	Feb. 28, 2022	Feb. 28, 2021	Aug. 31, 2021
Segment Reporting Information [Line Items]
Net Sales	$ 136,599	$ 120,654	$ 267,502	$ 240,084
Operating Profit (Loss)	4,484	5,707	10,891	14,777
Assets	821,462		821,462		$ 820,247
Industrial Tools & Services [Member] [Domain]
Segment Reporting Information [Line Items]
Net Sales	125,940	112,739	247,253	224,914
Operating Profit (Loss)	12,582	13,857	30,646	31,014
Assets	656,199		656,199		641,256
Products [Member]
Segment Reporting Information [Line Items]
Net Sales	97,498	87,195	189,847	169,768
Service & Rental [Member]
Segment Reporting Information [Line Items]
Net Sales	28,442	25,544	57,406	55,146
Other Operating Segment [Member]
Segment Reporting Information [Line Items]
Net Sales	10,659	7,915	20,249	15,170
Operating Profit (Loss)	334	(1,873)	(923)	(3,682)
Assets	52,965		52,965		52,745
General Corporate
Segment Reporting Information [Line Items]
Operating Profit (Loss)	(8,432)	$ (6,277)	(18,832)	$ (12,555)
Assets	$ 112,298		$ 112,298		$ 126,246

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Contingencies and Litigation - Additional Information (Details) - USD ($) $ in Millions	Feb. 28, 2022	Aug. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
Outstanding letters of credit	$ 9.3	$ 11.9
Contractual Obligation, Future Minimum Payments Due, Remainder of Lease Payments	$ 4.5

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Leases Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2022	Feb. 28, 2021	Feb. 28, 2022	Feb. 28, 2021
Components of Lease Expense [Abstract]
Operating Lease, Cost	$ 3,698	$ 3,766	$ 7,423	$ 7,471
Short-term Lease, Cost	399	397	849	810
Variable Lease, Cost	$ 1,110	$ 865	$ 2,014	$ 1,747

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Leases Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands	6 Months Ended
	Feb. 28, 2022	Feb. 28, 2021
Supplemental Cash Flow Information Related to Leases [Abstract]
Operating Lease, Payments	$ 7,190	$ 7,486
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	$ 3,598	$ 1,360

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Leases Leases (Details)	Feb. 28, 2022
Operating Leased Assets [Line Items]
Lessee, Operating Lease, Renewal Term	5 years
Minimum
Operating Leased Assets [Line Items]
Lessee, Operating Lease, Term of Contract	3 years
Maximum
Operating Leased Assets [Line Items]
Lessee, Operating Lease, Term of Contract	15 years