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 November 30, 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 December 16, 2022 was 56,973,236.

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	18
Item 3—Quantitative and Qualitative Disclosures about Market Risk	22
Item 4—Controls and Procedures	23
Part II—Other Information
Item 2—Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 6—Exhibits	24

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. The terms “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:

•supply chain issues, including shortages of adequate component supply that increase our costs or cause delays in our ability to fulfill orders;

•failure to estimate customer demand properly may result or could have an adverse impact on our business and operating results and our relationship with customers;

•the deterioration of, or instability in, the domestic and international economy and/or in our various end markets, including as a result of geopolitical activity;

•decreases in sales and/or increases in costs or reduced availability of commodities or components used in the production of our products due to sanctions and export controls targeting Russia in connection with its invasion of Ukraine;

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

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

•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;

•logistics challenges, including global freight capacity shortages, significant increases in freight costs or other delays in our ability to fulfill orders;

1

•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;

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

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

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

•our ability to execute on our growth strategy;

•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, disposed businesses;

•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;

•a global economic recession;

•the impact of rapidly rising interest rates;

•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, 2022.

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 2023," 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 November 30,
	2022		2021
Net sales	$	139,382	$	130,903
Cost of products sold	71,476		71,277
Gross profit	67,906		59,626
Selling, general and administrative expenses	53,247		48,477
Amortization of intangible assets	1,368		2,005
Restructuring charges	982		2,737
Operating profit	12,309		6,407
Financing costs, net	2,815		961
Other expense, net	702		480
Earnings before income tax expense	8,792		4,966
Income tax expense	2,383		1,781
Net earnings from continuing operations	6,409		3,185
Earnings (loss) from discontinued operations, net of income taxes	1,044		(397)
Net earnings	$	7,453	$	2,788
Earnings per share from continuing operations
Basic	$	0.11	$	0.05
Diluted	$	0.11	$	0.05
Earnings (loss) per share from discontinued operations
Basic	$	0.02	$	(0.01)
Diluted	$	0.02	$	(0.01)
Earnings per share*
Basic	$	0.13	$	0.05
Diluted	$	0.13	$	0.05
Weighted average common shares outstanding
Basic	56,886		60,261
Diluted	57,317		60,621
*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 November 30,
	2022		2021
Net earnings	$	7,453	$	2,788
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments	5,941		(10,380)
Pension, other postretirement benefit plans, and cash flow hedges	83		336
Total other comprehensive income (loss), net of tax	6,024		(10,044)
Comprehensive income (loss)	$	13,477	$	(7,256)

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)
	November 30, 2022		August 31, 2022
ASSETS
Current assets
Cash and cash equivalents	$	129,243	$	120,699
Accounts receivable, net	97,707		106,747
Inventories, net	90,664		83,672
Other current assets	35,059		31,262
Total current assets	352,673		342,380
Property, plant and equipment, net	41,784		41,372
Goodwill	261,659		257,949
Other intangible assets, net	41,031		41,507
Other long-term assets	77,254		74,104
Total assets	$	774,401	$	757,312
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Trade accounts payable	$	74,673	$	72,524
Accrued compensation and benefits	23,441		21,390
Current maturities of debt	1,875		—
Short-term debt	—		4,000
Income taxes payable	4,992		4,594
Other current liabilities	49,165		50,680
Total current liabilities	154,146		153,188
Long-term debt, net	200,359		200,000
Deferred income taxes	7,887		7,355
Pension and postretirement benefit liabilities	11,902		11,941
Other long-term liabilities	65,784		66,217
Total liabilities	440,078		438,701
Commitments and contingencies (Note 14)
Shareholders’ equity
Class A common stock, $0.20 par value per share, authorized 168,000,000 shares, issued 83,529,142 and 83,397,458 shares, respectively	16,706		16,679
Additional paid-in capital	215,194		212,986
Treasury stock, at cost, 26,558,965 shares	(742,844)		(742,844)
Retained earnings	974,204		966,751
Accumulated other comprehensive loss	(128,937)		(134,961)
Stock held in trust	(3,239)		(3,209)
Deferred compensation liability	3,239		3,209
Total shareholders' equity	334,323		318,611
Total liabilities and shareholders’ equity	$	774,401	$	757,312

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)

	Three Months Ended November 30,
	2022		2021
Operating Activities
Net earnings	$	7,453	$	2,788
Less: Net earnings (loss) from discontinued operations	1,044		(397)
Net earnings from continuing operations	6,409		3,185
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities - continuing operations:
Depreciation and amortization	4,193		5,175
Stock-based compensation expense	2,155		6,147
(Benefit) provision for deferred income taxes	(33)		423
Amortization of debt issuance costs	460		120
Other non-cash benefits (charges)	11		(13)
Changes in components of working capital and other, excluding acquisitions and divestitures:
Accounts receivable	9,844		(10,801)
Inventories	(5,684)		(9,823)
Trade accounts payable	2,130		2,358
Prepaid expenses and other assets	(8,377)		140
Income tax accounts	5,104		682
Accrued compensation and benefits	1,529		(3,509)
Other accrued liabilities	73		1,975
Cash provided by (used in) operating activities - continuing operations	17,814		(3,941)
Cash used in operating activities - discontinued operations	(281)		(785)
Cash provided by (used in) operating activities	17,533		(4,726)
Investing Activities
Capital expenditures	(3,028)		(3,293)
Proceeds from sale of property, plant and equipment	493		133
Cash used in investing activities - continuing operations	(2,535)		(3,160)
Cash used in investing activities	(2,535)		(3,160)
Financing Activities
Borrowings on revolving credit facility	14,000		5,000
Principal repayments on revolving credit facility	(11,000)		(5,000)
Proceeds from issuance of term loan	200,000		—
Payment for redemption of revolver	(200,000)		—
Swingline borrowings/repayments, net	(4,000)		—
Payment of debt issuance costs	(2,417)		—
Taxes paid related to the net share settlement of equity awards	(969)		(1,393)
Stock option exercises & other	972		85
Payment of cash dividend	(2,274)		(2,409)
Cash used in financing activities - continuing operations	(5,688)		(3,717)
Cash used in financing activities	(5,688)		(3,717)
Effect of exchange rate changes on cash	(766)		(2,216)
Net increase (decrease) in cash and cash equivalents	8,544		(13,819)
Cash and cash equivalents - beginning of period	120,699		140,352
Cash and cash equivalents - end of period	$	129,243	$	126,533

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, services, technology and solutions company serving a broad and diverse set of customers in more than 100 countries. The Company has one reportable segment, the Industrial Tools & Services Segment ("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, 2022 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 2022 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 months ended November 30, 2022 are not necessarily indicative of the results that may be expected for the entire fiscal year ending August 31, 2023.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, many countries, including the 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 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):

	November 30, 2022		August 31, 2022
Foreign currency translation adjustments	$	110,137	$	116,078
Pension and other postretirement benefit plans, net of tax	18,800		18,883
Accumulated other comprehensive loss	$	128,937	$	134,961

7

Property Plant and Equipment

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

	November 30, 2022		August 31, 2022
Land, buildings and improvements	$	14,451	$	14,121
Machinery and equipment	144,963		141,571
Gross property, plant and equipment	159,414		155,692
Less: Accumulated depreciation	(117,630)		(114,320)
Property, plant and equipment, net	$	41,784	$	41,372

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 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 13, "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 November 30,
	2022		2021
Revenues recognized at point in time	$	109,903	$	100,174
Revenues recognized over time	29,479		30,729
Total	$	139,382	$	130,903

Contract Balances

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

	November 30, 2022		August 31, 2022
Receivables, which are included in accounts receivable, net	$	97,707	$	106,747
Contract assets, which are included in other current assets	1,398		2,397
Contract liabilities, which are included in other current liabilities	3,156		2,804

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

8

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 be collected in the future and records the appropriate provision. The allowance for doubtful accounts was $17.3 million and $17.5 million at November 30, 2022 and August 31, 2022, respectively.

As indicated in the "Concentration of Credit Risk" section below, as of November 30, 2022 the Company was exposed to a concentration of credit risk with an agent as a result of its continued payment delinquency. As of November 30, 2022 the Company has a reserve of $13.2 million based on the consideration of the factors listed below, which fully reserves for the outstanding accounts receivable balance for this agent. The allowance for doubtful accounts, for this particular agent as of November 30, 2022 represents management's best estimate of the amount probable of collection and considers various factors with the respect to this matter, including, but not limited to, (i) the lack of payment by the agent since the fiscal quarter ended February 28, 2021, (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 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.

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 November 30, 2022, the Company was exposed to a concentration of credit risk as a result of the payment delinquency of one of our agents whose accounts receivable represent 11.3% of the Company's outstanding accounts receivable. As of November 30, 2022, the Company has fully reserved for the amounts due from this agent.

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 November 30, 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 long-term customer contracts (project durations of greater than three months) and are recognized over time. The Company estimates that substantially all of the $3.2 million will be recognized in net sales from satisfying those performance obligations within the next twelve months.

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. ASCEND Transformation Program

In March 2022, the Company announced the launch of ASCEND, a new transformation program focused on driving accelerated earnings growth and efficiency across the business with the goal of delivering an incremental $40 to $50 million of annual operating profit once fully implemented. As part of ASCEND, the Company is focusing on the following key initiatives: (i) accelerating organic growth go-to-market strategies, (ii) improving operational excellence and production efficiency by utilizing a lean approach and (iii) driving greater efficiency and productivity in SG&A by better leveraging resources to create a more efficient and agile organization.

The Company is implementing the program and anticipates investing approximately $60 to $65 million (as disclosed in Note 4, "Restructuring Charges," approximately $10 to $15 million of these investments will be in the form of restructuring charges) over the life of the program, which is expected to be finalized as we exit fiscal 2024. Elements of these investments could include such cash costs as capital expenditures, restructuring costs, third-party support, and incentive costs. Total program expenses were approximately $10.4 million for the three months ended November 30, 2022, of which $9.4 million were recorded within SG&A expenses and included third-party support costs and $1.0 million were recorded within restructuring expenses (see Note 4, "Restructuring Charges," below).

Note 4. 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 Company's operating structure by the Company's new President and Chief Executive Officer (hired effective October 2021), the Company recorded $2.7 million of charges in the three months ended November 30, 2021 in order to further simplify and streamline the organizational structure. The total cumulative charges for the 2019 plan, which ended in the the third quarter of fiscal year 2022, were $18.0 million.

On June 27, 2022, the Company approved a new restructuring plan in connection with the initiatives identified as part of the ASCEND transformation program (see Note 3, “ASCEND Transformation Program”) to drive greater efficiency and productivity in global selling, general and administrative resources. The total costs of this plan were then estimated at $6 to $10 million, constituting predominately severance and other employee-related costs to be incurred as cash expenditures impacting both IT&S and Corporate. On September 23, 2022, the Company approved an updated restructuring plan. The costs of this updated plan (which includes the amounts for the plan approved in June) are estimated at $10 to $15 million. These costs are expected to be incurred over the expected duration of the transformation program, ending in the fourth quarter of fiscal year 2024. For the three months ended November 30, 2022, the Company recorded $1 million of restructuring charges associated with the ASCEND transformation program.

The following summarizes restructuring reserve activity (which for the three months ended November 30, 2021 excludes $0.7 million and $0.5 million of charges associated with the 2019 Plan for IT&S and Corporate, respectively, 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):

	Three Months Ended November 30, 2022
	2019 Plan				ASCEND Plan
	IT&S		Corporate		IT&S		Corporate
Balance as of August 31, 2022	$	212	$	6	$	2,008	$	797
Restructuring charges	—		—		944		38
Cash payments	(19)		—		(1,211)		(117)
Impact of changes in foreign currency rates	4		—		67		—
Balance as of November 30, 2022	$	197	$	6	$	1,808	$	718

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	Three Months Ended November 30, 2021
	IT&S		Corporate
Balance as of August 31, 2021	$	1,737	$	26
Restructuring charges	874		695
Cash payments	(609)		(8)
Impact of changes in foreign currency rates	(46)		—
Balance as of November 30, 2021	$	1,956	$	713

Total restructuring charges (inclusive of the Other segment) were $1.0 million and $2.7 million in the three months ended November 30, 2022 and 2021, respectively, being reported in "Restructuring charges."

Note 5. 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 "Earnings (loss) from discontinued operations, net of income taxes" in the Condensed Consolidated Statements of Earnings for all periods presented. All other discontinued operations activity included within the Condensed Consolidated Statements of Earnings 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 "Earnings (loss) from discontinued operations, net of income taxes" within the Condensed Consolidated Statements of Earnings (in thousands) :

	Three Months Ended November 30,
	2022		2021
Selling, general and administrative expenses	$	5	$	503
Impairment & divestiture benefit	(1,329)		—
Operating profit (loss)	1,324		(503)
Other loss, net	—		—
Earnings (loss) before income tax expense (benefit)	1,324		(503)
Income tax expense (benefit)	280		(106)
Earnings (loss) from discontinued operations, net of income taxes	$	1,044	$	(397)

Note 6. 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 three months ended November 30, 2022 are as follows (in thousands):

	IT&S		Other		Total
Balance as of August 31, 2022	$	246,740	$	11,209	$	257,949
Impact of changes in foreign currency rates	3,710		—		3,710
Balance as of November 30, 2022	$	250,450	$	11,209	$	261,659

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

		November 30, 2022						August 31, 2022
	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	$	136,521	$	119,590	$	16,931	$	135,101	$	117,275	$	17,826
Patents	11	13,849		13,248		601		13,708		13,104		604
Trademarks and tradenames	12	3,164		2,387		777		3,132		2,329		803
Indefinite lived intangible assets:
Tradenames	N/A	22,722		—		22,722		22,274		—		22,274
		$	176,256	$	135,225	$	41,031	$	174,215	$	132,708	$	41,507

The Company estimates that amortization expense will be $3.9 million for the remaining nine months of fiscal 2023. Amortization expense for future years is estimated to be: $3.7 million in fiscal 2024, $3.0 million in fiscal 2025, $1.8 million in both fiscal 2026 and 2027, $1.6 million in fiscal 2028 and $2.5 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.

Note 7. 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 three months ended November 30, 2022 and 2021, respectively (in thousands):

	Three Months Ended November 30,
	2022		2021
Beginning balance	$	1,140	$	1,300
Provision for warranties	234		395
Warranty payments and costs incurred	(256)		(230)
Impact of changes in foreign currency rates	18		(31)
Ending balance	$	1,136	$	1,434

Note 8. Debt

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

	November 30, 2022		August 31, 2022
Previous Senior Credit Facility
Short-term debt	$	—	$	4,000
Revolver	—		200,000
New Senior Credit Facility
Revolver	3,000		—
Term Loan	200,000		—
Total Senior Indebtedness	203,000		204,000
Less: Current maturities of long-term debt	(1,875)		—
Short-term debt	—		(4,000)
Debt issuance costs	(766)		—
Total long-term debt, less current maturities	$	200,359	$	200,000

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Senior Credit Facility

Prior to refinancing the Company's senior credit facility on September 9, 2022, the Company's previous senior credit facility matured in March 2024, and provided a $400 million revolving line of credit, a $200 million term loan and a $300 million accordion. Borrowings bore 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 was 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 previous senior credit facility contained two financial covenants, which were a maximum leverage ratio of 3.75:1 and a minimum interest coverage ratio of 3.5:1. Certain transactions resulted in 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.

On September 9, 2022, the Company refinanced its previous senior credit facility with a new $600 million senior credit facility, comprised of a $400 million revolving line of credit and a $200 million term loan, which will mature in September 2027. The Company has the option to request up to $300 million of additional revolving commitments and/or term loans under the new facility, subject to customary conditions, including the commitment of the participating lenders. The new facility replaces LIBOR with adjusted term SOFR as the interest rate benchmark and provides for interest rate margins above adjusted term SOFR ranging from 1.125% to 1.875% per annum depending on the Company’s net leverage ratio. Borrowings under the new facility initially bear interest at adjusted term SOFR plus 1.125% per annum.

In addition, the new facility contains financial covenants requiring the Company to not permit (i) the net leverage ratio, determined as of the end of each of its fiscal quarters, to exceed 3.75 to 1.00 (or, at the Company’s election and subject to certain conditions, 4.25 to 1.00 for the covenants period during which certain material acquisitions occur and the next succeeding four testing periods) or (ii) the interest coverage ratio, determined as of the end of each of its fiscal quarters, to be less than 3.00 to 1.00. Borrowings under the new facility are secured by substantially all personal property assets of the Company and its domestic subsidiary guarantors (other than certain specified excluded assets) and certain of the equity interests of certain subsidiaries of the Company. The Company was in compliance with all financial covenants under the new facility at November 30, 2022.

At November 30, 2022, there was $3.0 million of borrowings under the revolving line of credit and $393.4 million available under the revolving line of credit facility after reduction for $3.6 million of outstanding letters of credit issued under the new facility.

Note 9. 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 November 30, 2022 and August 31, 2022 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 $0.3 million and less than $0.1 million at November 30, 2022 and August 31, 2022, respectively. 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.

Note 10. 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.

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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 expense" in the Condensed Consolidated Statements of Earnings). The U.S. dollar equivalent notional value of these short duration foreign currency exchange contracts was $22.0 million and $16.7 million at November 30, 2022 and August 31, 2022, respectively. The fair value of outstanding foreign currency exchange contracts was a net liability of $0.3 million and less than $0.1 million at November 30, 2022 and August 31, 2022, respectively. Net foreign currency gain (loss) (included in "Other expense" in the Condensed Consolidated Statements of Earnings) related to these derivative instruments were as follows (in thousands):

	Three Months Ended November 30,
	2022		2021
Foreign currency loss, net	$	(636)	$	(181)

Note 11. 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 26,558,965 shares of common stock for $742.8 million. The Company suspended the initial share repurchase program in response to the COVID-19 pandemic in the third quarter of fiscal 2020. In March 2022, the Company's Board of Directors rescinded its prior share repurchase authorization and approved a new share repurchase program authorizing the repurchase of a total of 10,000,000 shares of the Company's outstanding common stock. The Company did not repurchase shares in either of the three months ended November 30, 2022 or 2021. As of November 30, 2022, the maximum number of shares that may yet be purchased under the program is 6,240,265 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 November 30,
	2022		2021
Numerator:
Net earnings from continuing operations	$	6,409	$	3,185
Net earnings (loss) from discontinued operations	1,044		(397)
Net earnings	$	7,453	$	2,788
Denominator:
Weighted average common shares outstanding - basic	56,886		60,261
Net effect of dilutive securities - stock based compensation plans	431		360
Weighted average common shares outstanding - diluted	57,317		60,621
Earnings per share from continuing operations:
Basic	$	0.11	$	0.05
Diluted	$	0.11	$	0.05
Earnings (loss) per share from discontinued operations:
Basic	$	0.02	$	(0.01)
Diluted	$	0.02	$	(0.01)
Earnings per share:*
Basic	$	0.13	$	0.05
Diluted	$	0.13	$	0.05
Anti-dilutive securities from stock based compensation plans (excluded from earnings per share calculation)	818		846
*The total of Earnings per share from continuing operations and Earnings (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 November 30, 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, 2022	83,397	$	16,679	$	212,986	$	(742,844)	$	966,751	$	(134,961)	$	(3,209)	$	3,209	$	318,611
Net earnings	—	—		—		—		7,453		—		—		—		7,453
Other comprehensive loss, net of tax	—	—		—		—		—		6,024		—		—		6,024
Stock contribution to employee benefit plans and other	3	1		41		—		—		—		—		—		42
Vesting of equity awards	84	17		(17)		—		—		—		—		—		—
Stock based compensation expense	—	—		2,155		—		—		—		—		—		2,155
Stock option exercises	42	8		922		—		—		—		—		—		930
Tax effect related to net share settlement of equity awards	—	—		(969)		—		—		—		—		—		(969)
Stock issued to, acquired for and distributed from rabbi trust	3	1		76		—		—		—		(30)		30		77
Balance at November 30, 2022	83,529	$	16,706	$	215,194	$	(742,844)	$	974,204	$	(128,937)	$	(3,239)	$	3,239	$	334,323

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The following table illustrates the changes in the balances of each component of shareholders' equity for the three months ended November 30, 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, 2021	83,022	$	16,604	$	202,971	$	(667,732)	$	953,339	$	(92,984)	$	(3,067)	$	3,067	$	412,198
Net earnings	—	—		—		—		2,788		—		—		—		2,788
Other comprehensive income, net of tax	—	—		—		—		—		(10,044)		—		—		(10,044)
Stock contribution to employee benefit plans and other	2	1		84		—		—		—		—		—		85
Vesting of equity awards	67	17		(17)		—		—		—		—		—		—
Stock based compensation expense	—	—		6,147		—		—		—		—		—		6,147
Tax effect related to net share settlement of equity awards	—	—		(1,393)		—		—		—		—		—		(1,393)
Stock issued to, acquired for and distributed from rabbi trust	1	—		25		—		—		—		(25)		25		25
Balance at November 30, 2021	83,092	$	16,622	$	207,817	$	(667,732)	$	956,127	$	(103,028)	$	(3,092)	$	3,092	$	409,806

Note 12. 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 November 30,
	2022			2021
Earnings from continuing operations before income tax expense	$	8,792		$	4,966
Income tax expense	2,383			1,781
Effective income tax rate	27.1		%	35.9		%

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 foreign rate differentials, 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 and Foreign-Derived Intangible Income provisions.

The effective tax rate for the three months ended November 30, 2022 was 27.1%, compared to 35.9% for the comparable prior-year period. The effective tax rate in each time period was 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 November 30, 2022 was primarily due to tax benefits driven by revaluing tax assets due to tax rate changes. Both the current and prior-year effective income tax rates include the impact of non-recurring items.

Note 13. 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 infrastructure, industrial maintenance, repair and operations, oil & gas, mining, alternative and renewable energy, civil construction and other markets. The Other segment is included for purposes of reconciliation of the respective balances below to the condensed consolidated financial statements.

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

	Three Months Ended November 30,
	2022		2021
Net Sales by Reportable Segment & Product Line
IT&S Segment
Product	$	98,917	$	92,350
Service & Rental	28,380		28,963
	127,297		121,313
Other Segment	12,085		9,590
	$	139,382	$	130,903
Operating Profit (Loss)
IT&S Segment	$	26,640	$	18,064
Other Segment	1,424		(1,257)
General Corporate	(15,755)		(10,400)
	$	12,309	$	6,407

	November 30, 2022		August 31, 2022
Assets
IT&S Segment	$	615,134	$	618,412
Other Segment	45,338		46,428
General Corporate	113,929		92,472
	$	774,401	$	757,312

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 and 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.

Note 14. Commitments and Contingencies

The Company had outstanding letters of credit of $9.2 million and $10.7 million at November 30, 2022 and August 31, 2022, 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 November 30, 2022 were $3.2 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

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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 supported the Company to record an expense in the fiscal year-ended August 31, 2021, representing the low end of a reasonable range of financial penalties the Company may incur as no other point within the range was deemed more probable. The Company has not adjusted its estimate of financial penalties as a result of the completion of the investigation in the three months ended November 30, 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 15. 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 three months ended November 30, 2022.

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

	Three Months Ended November 30,
	2022		2021
Lease Cost:
Operating lease cost	$	3,273	$	3,725
Short-term lease cost	494		450
Variable lease cost	1,115		903

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

	Three Months Ended November 30,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,255	$	3,611
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	483		810

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

Enerpac Tool Group Corp. is a premier industrial tools, services, technology and solutions company serving a broad and diverse set of customers in more than 100 countries. The Company makes complex, often hazardous jobs possible safely and efficiently. Enerpac Tool Group's businesses are global leaders in high pressure hydraulic tools, controlled force products and solutions for precise positioning of heavy loads that help customers safely and reliably tackle some of the most challenging jobs around the world. The Company was founded in 1910 and is headquartered in Menomonee Falls, Wisconsin. The company has one reportable segment, the Industrial Tools & Services Segment ("IT&S"). The IT&S 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. Financial information related to the Company's reportable segment is included in Note 13, "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 sustainable returns for our shareholders through above-market growth in our core business, expanding our margins, generating strong cash flow and being disciplined in the deployment of our capital. We intend to grow through

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execution of our organic growth strategy focused on key vertical markets which benefit from long-term macro trends, driving customer driven innovation, expansion of our digital ecosystem to acquire and engage customers, and expansion in emerging markets such as Asia Pacific. In addition to organic growth, we also will focus on margin expansion through operational efficiency techniques including lean, continuous improvement and 80/20 to drive productivity and lower costs and leverage our selling, general and administrative expenses. We also intend to use these techniques and pricing actions to offset commodity increases and inflationary pricing. Finally, cash flow generation is critical to achieving our financial and long-term strategic objectives. We believe driving profitable growth and margin expansion will result in cash flow generation and we expect to supplement that through minimizing primary working capital. The cash flow that results from the execution of our strategy will be allocated in a disciplined way toward investment in the business, maintaining our strong balance sheet, disciplined M&A and opportunistically returning capital to shareholders. We anticipate the compounding effect of reinvesting in our business will fuel further growth and profitable returns.

General Business Update

In March 2022, the Company announced the start of its ASCEND transformation program (“ASCEND”). ASCEND’s key initiatives include accelerating organic growth go-to-market strategies, improving operational excellence and production efficiency by utilizing a Lean approach, and driving greater efficiency and productivity in selling, general and administrative expense by better leveraging resources to create a more efficient and agile organization. The Company expects that it will deliver an incremental $40-$50 million of annual operating profit from the execution of ASCEND, with the full run rate of operating profit expected to be reflected in its results as it exits fiscal 2024 and fully incorporated into its fiscal 2025 projections. Enerpac Tool Group anticipates investing approximately $60-$65 million over the life of the program to support the ASCEND initiatives.

In June 2022, the Company approved a restructuring plan in connection with the initiatives identified as part of the ASCEND transformation program (see Note 3, “ASCEND Transformation Program” in the notes to the consolidated financial statements) to drive greater efficiency and productivity in global selling, general and administrative resources. The total costs of this plan were then estimated at $6 to $10 million, constituting predominately severance and other employee-related costs to be incurred as cash expenditures and impacting both IT&S and Corporate. On September 23, 2022, the Company approved an updated restructuring plan. The costs of this updated plan (which includes the amounts for the plan approved in June) are estimated at $10 to $15 million. These costs are expected to be incurred over the expected duration of the transformation program, ending in the fourth quarter of fiscal year 2024.

Results of Operations

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

	Three Months Ended November 30,
Results from Continuing Operations (1)	2022				2021
Net sales	$	139	100	%	$	131	100	%
Cost of products sold	71		51	%	71		54	%
Gross profit	68		49	%	60		46	%
Selling, general and administrative expenses	53		38	%	49		37	%
Amortization of intangible assets	1		1	%	2		2	%
Restructuring charges	1		1	%	3		2	%
Operating profit	12		9	%	6		5	%
Financing costs, net	3		2	%	1		1	%
Other expense, net	1		1	%	—		0	%
Earnings before income tax expense	9		6	%	5		4	%
Income tax expense	2		1	%	2		2	%
Net earnings from continuing operations	6		4	%	3		2	%
Diluted earnings per share from continuing operations	$	0.11			$	0.05

(1) The summation of the individual components may not equal the total due to rounding.

Consolidated net sales for the first quarter of fiscal 2023 were $139 million, an increase of $8 million, or 6%, from the prior-year comparable period. Due to the strengthening of the U.S. dollar, foreign exchange rates unfavorably impacted sales by $7 million or 6%. "Core Sales", which excludes the impact of foreign currency changes and the impact from recent acquisition and divestitures to net sales, increased $16 million, or 13%. The product pricing actions that the Company took beginning in late fiscal 2021 and into fiscal 2023 in response to significant inflationary pressures on commodities, freight and energy costs, coupled with year-over-year volume growth, were the key drivers of the increase in core sales. Gross profit as a percentage of net sales increased 3% as a result of

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pricing actions, sales mix and productivity efficiency. Operating profit is $6 million higher in the first quarter of fiscal 2023 compared to fiscal 2022. Selling, general, and administrative expenses increased $4 million primarily due to ASCEND transformation program charges of $9 million offset by lower restructuring ($2 million) and leadership transition charges ($3 million) compared to the prior year.

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 civil construction markets. Its primary products include branded tools, cylinders, pumps, 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 November 30,
	2022			2021
Net sales	$	127		$	121
Operating profit	27			18
Operating profit %	20.9		%	14.9		%

IT&S segment net sales for the first quarter of fiscal 2023 increased by $6 million, or 5%. Core sales increased $13 million, or 11%, year over year due to the strengthening of the U.S. dollar unfavorably impacting sales. Year-over-year increase in sales is due to pricing actions and volume increases in the Americas and Europe.

Operating profit percentage increased 6% from the prior-year quarter as pricing actions and sales mix offset increased costs in supply chain and logistics.

Corporate

Corporate expenses were $16 million and $10 million in the three months ended November 30, 2022 and 2021, respectively, which represents an increase of $6 million year over year. The increase for the three months ended November 30, 2022 was primarily a result of increased ASCEND transformation program charges and incentive compensation offset by lower leadership transition charges.

Financing Costs, net

Net financing costs were $3 million and $1 million for the three months ended November 30, 2022 and 2021, respectively. Financing costs increased due to due higher debt balances (approximately $25 million) and higher interest rates.

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 November 30,
	2022			2021
Earnings from continuing operations before income tax expense	$	9		$	5
Income tax expense	2			2
Effective income tax rate	27.1		%	35.9		%

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 foreign rate differentials, 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 and Foreign-Derived Intangible Income provisions.

The effective tax rate for the three months ended November 30, 2022 was 27.1%, compared to 35.9% for the comparable prior-year period. The effective tax rate in each time period was 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 November 30, 2022 was primarily due to

20

tax benefits driven by revaluing tax assets due to tax rate changes. Both the current and prior-year effective income tax rates include the impact of non-recurring items.

Cash Flows and Liquidity

At November 30, 2022, we had $129 million of cash and cash equivalents of which $119 million was held by our foreign subsidiaries and $10 million was held domestically. The following table summarizes our cash flows provided by operating, investing and financing activities (dollars in millions):

	Three Months Ended November 30,
	2022		2021
Cash provided by (used in) operating activities	$	18	$	(5)
Cash used in investing activities	(3)		(3)
Cash used in financing activities	(6)		(4)
Effect of exchange rate changes on cash	(1)		(2)
Net increase (decrease) in cash and cash equivalents	$	9	$	(14)

Net cash provided by operating activities was $18 million for the three months ended November 30, 2022 as compared to $5 million net cash used in operating activities for the three months ended November 30, 2021. The $23 million increase in cash flow provided by operating activities was the result of $3 million in higher earnings and $21 million in account receivable balances from stronger collections and timing of large project billings.

Net cash used in investing activities was $3 million for the three months ended November 30, 2022 as compared to $3 million for the three months ended November 30, 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 three months ended November 30, 2022 compared to $4 million for the three months ended November 30, 2021. The net cash used in financing activities for the first quarter of fiscal 2023 predominantly consisted of $2 million paid for the annual dividend and $3 million for debt issuance costs associated to our new senior credit facility offset by a reduction of $1 million in total borrowings. The net cash used in financing activities for the first quarter of fiscal 2022 predominantly consisted of $2 million paid for the annual dividend and $2 million for taxes paid related to the net share settlement of equity awards.

On September 9, 2022, the Company refinanced its previous senior credit facility with a new $600 million senior credit facility, comprised of a $400 million revolving line of credit and a $200 million term loan, which will mature in September 2027. The Company has the option to request up to $300 million of additional revolving commitments and/or term loans under the new facility, subject to customary conditions, including the commitment of the participating lenders. See Note 8, "Debt" in the notes to the condensed consolidated financial statements for further details of the senior credit facility.

At November 30, 2022, there was $3 million of borrowings under the revolving line of credit and $393 million available under the revolving line of credit facility after reduction for $4 million of outstanding letters of credit issued under the new facility.The Company was in compliance with all financial covenants under the senior credit facility at November 30, 2022.

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):

	November 30, 2022		PWC%		August 31, 2022		PWC%
Accounts receivable, net	$	98	18	%	$	107	18	%
Inventory, net	91		16	%	84		14	%
Accounts payable	(75)		(13)	%	(73)		(12)	%
Net primary working capital	$	114	20	%	$	118	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,

21

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 November 30, 2022 were $3 million with monthly payments extending to fiscal 2025.

We had outstanding letters of credit totaling $9.2 million and $10.7 million at November 30, 2022 and August 31, 2022, 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 14, "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 November 30, 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, 2022.

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 information about more of the Company’s policies, methodology 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, 2022.

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: As of November 30, 2022, long-term debt consisted of $3.0 million of borrowing under the revolving line of credit (variable rate debt). A ten percent increase in the average costs of our variable rate debt would have resulted in a $0.2 million increase in financing costs for the three months ended November 30, 2022.

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 10, “Derivatives” in the notes to the consolidated financial statements 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 $0.1 million, respectively, for the three months ended November 30, 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 $35 million reduction to equity (accumulated other comprehensive loss) as of November 30, 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.

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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 November 30, 2022 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

23

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 26,558,965 shares of common stock for $743 million. The Company suspended the initial share repurchase program in response to the COVID-19 pandemic in the third quarter of fiscal 2020. In March 2022, the Company's Board of Directors rescinded its prior share repurchase authorization and approved a new share repurchase program authorizing the repurchase of a total of 10,000,000 shares of the Company's outstanding common stock. The Company did not repurchase shares in either of the three months ended November 30, 2022 or 2021. As of November 30, 2022, the maximum number of shares that may yet be purchased under the program is 6,240,265 shares.

Item 6 – Exhibits

Exhibit	Description	Incorporated Herein By Reference To	Filed Herewith	Furnished Herewith
10.1	Credit Agreement dated as of September 9, 2022 among Enerpac Tool Group Corp., the initial subsidiary borrowers party thereto, the guarantors party thereto, the lenders party thereto, and PNC Bank, National Association, as administrative agent	Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on September 15, 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	The following materials from the Enerpac Tool Group Corp. Form 10-Q for the three months ended November 30, 2022 formatted in Inline Extensible Business Reporting Language (Inline XBRL): (i) the Condensed Consolidated Statements of Earnings, (ii) the Condensed Consolidated Statements of Comprehensive (Loss) Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows and (v) the Notes to the Condensed Consolidated Financial Statements.		X
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in the Interactive Data Files submitted as Exhibit 101)

24

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: December 22, 2022	By:	/S/ ANTHONY P. COLUCCI
		Anthony P. Colucci
		Executive Vice President and Chief Financial Officer (Principal Financial Officer)

25

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: December 22, 2022

/s/ Paul E. Sternlieb

Paul E. Sternlieb
Chief Executive Officer and President

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Anthony P. Colucci, 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: December 22, 2022

/s/ Anthony Colucci

Anthony P. Colucci

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, 2022 (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: December 22, 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, 2022 (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: December 22, 2022

/s/ Anthony Colucci

Anthony P. Colucci

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	3 Months Ended
	Nov. 30, 2022	Dec. 16, 2022	Aug. 31, 2022
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Nov. 30, 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		56,973,236
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
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	83,529,142		83,397,458

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Income Statement [Abstract]
Net Sales	$ 139,382	$ 130,903
Cost of products sold	71,476	71,277
Gross profit	67,906	59,626
Selling, General and Administrative Expense	53,247	48,477
Amortization of intangible assets	1,368	2,005
Restructuring Charges	982	2,737
Operating profit	12,309	6,407
Financing costs, net	2,815	961
Other expense, net	702	480
Income tax (benefit) expense	2,383	1,781
Net Earnings from Continuing Operations	6,409	3,185
Net (Loss) Earnings from Discontinued Operations	1,044	(397)
Net (loss) earnings	$ 7,453	$ 2,788
Earnings (loss) per share
(Loss) Earnings per share from Continuing Operations, Per Basic Share	$ 0.11	$ 0.05
(Loss) Earnings per share from Continuing Operations, Per Diluted Share	0.11	0.05
(Loss) Earnings per share from Discontinued Operations, Per Basic Shares	0.02	(0.01)
(Loss) Earnings per share from Discontinued Operations, Per Diluted Share	0.02	(0.01)
(Loss) Earnings Per Share, Basic	0.13	0.05
(Loss) Earnings Per Share, Diluted	$ 0.13	$ 0.05
Weighted average common shares outstanding
Weighted average common shares outstanding - basic	56,886	60,261
Weighted Average Common Shares outstanding - diluted	57,317	60,621
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest, Total	$ 8,792	$ 4,966

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Net (loss) earnings	$ 7,453	$ 2,788
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments	5,941	(10,380)
Pension and other postretirement benefit plans	83	336
Other Comprehensive (Loss) Income, Net of Tax	6,024	(10,044)
Comprehensive (loss) income	$ 13,477	$ (7,256)

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Nov. 30, 2022	Aug. 31, 2022
Current assets
Cash and cash equivalents	$ 129,243	$ 120,699
Accounts receivable, net	97,707	106,747
Inventories, net	90,664	83,672
Other current assets	35,059	31,262
Total current assets	352,673	342,380
Property, plant and equipment, net	41,784	41,372
Goodwill	261,659	257,949
Other intangible assets, net	41,031	41,507
Other long-term assets	77,254	74,104
Total assets	774,401	757,312
Current liabilities
Trade accounts payable	74,673	72,524
Accrued compensation and benefits	23,441	21,390
Long-term Debt, Current Maturities	1,875	0
Short-Term Debt	0	4,000
Income taxes payable	4,992	4,594
Other current liabilities	49,165	50,680
Total current liabilities	154,146	153,188
Long-term debt, net	200,359	200,000
Deferred Income Taxes	7,887	7,355
Pension and postretirement benefit liabilities	11,902	11,941
Other long-term liabilities	65,784	66,217
Total liabilities	440,078	438,701
Shareholders’ equity
Class A common stock, $0.20 par value per share, authorized 168,000,000 shares, issued 83,529,142 and 83,397,458 shares, respectively	16,706	16,679
Additional paid-in capital	215,194	212,986
Treasury stock, at cost, 26,558,965 shares	(742,844)	(742,844)
Retained earnings	974,204	966,751
Accumulated other comprehensive loss	(128,937)	(134,961)
Stock held in trust	(3,239)	(3,209)
Deferred compensation liability	3,239	3,209
Total shareholders' equity	334,323	318,611
Total liabilities and shareholders’ equity	$ 774,401	$ 757,312

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares	Nov. 30, 2022	Aug. 31, 2022
Treasury Stock, Shares	26,558,965	26,558,965
Common Class A
Common Stock, Shares Authorized	168,000,000	168,000,000
Common Stock, Shares, Issued	83,529,142	83,397,458

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Operating Activities
Net (loss) earnings	$ 7,453	$ 2,788
Net (Loss) Earnings from Discontinued Operations	1,044	(397)
Net Earnings from Continuing Operations	6,409	3,185
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	4,193	5,175
Stock-based compensation expense	2,155	6,147
(Benefit) provision for deferred income taxes	(33)	423
Amortization of debt issuance costs	460	120
Other Noncash Income (Expense)	11	(13)
Changes in components of working capital and other, excluding acquisitions and divestitures:
Accounts receivable	9,844	(10,801)
Inventories	(5,684)	(9,823)
Trade accounts payable	2,130	2,358
Prepaid expenses and other assets	(8,377)	140
Income tax accounts	5,104	682
Accrued compensation and benefits	1,529	(3,509)
Other accrued liabilities	73	1,975
Cash provided by (used in) operating activities, Continuing Operations	17,814	(3,941)
Cash (used in) provided by operating activities, Discontinued Operations	(281)	(785)
Cash (Used in) Provided By Operating Activities	17,533	(4,726)
Investing Activities
Capital expenditures	(3,028)	(3,293)
Proceeds from sale of property, plant and equipment	493	133
Cash used in investing activities, Continuing Operations	(2,535)	(3,160)
Cash Provided by Investing Activities	(2,535)	(3,160)
Financing Activities
Borrowings on Revolving Credit	14,000	5,000
Principal Repayment on Revolving Credit Facility	(11,000)	(5,000)
Taxes paid related to the net share settlement of equity awards	(969)	(1,393)
Stock option exercises and other	972	85
Cash dividend	(2,274)	(2,409)
Net Cash Used in Financing Activities, Continuing Operations	(5,688)	(3,717)
Cash used in financing activities	(5,688)	(3,717)
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect, Total	8,544	(13,819)
Effect of Exchange Rate on Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Continuing Operations	(766)	(2,216)
Proceeds from (Repayments of) Short-Term Debt, Maturing in Three Months or Less	(4,000)	0
Payments of Debt Issuance Costs	(2,417)	0
Proceeds from Issuance of Term Loan	200,000	0
Payment for redemption of term loan	(200,000)	0
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents	$ 129,243	$ 126,533

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

3 Months Ended

Nov. 30, 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):

	November 30, 2022		August 31, 2022
Foreign currency translation adjustments	$	110,137	$	116,078
Pension and other postretirement benefit plans, net of tax	18,800		18,883
Accumulated other comprehensive loss	$	128,937	$	134,961

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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

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

Net (loss) earnings

2,788

2,788

Other Comprehensive (Loss) Income, Net of Tax

(10,044)

(10,044)

Stock Issued During Period, Shares, Employee Benefit Plan

2

Stock Issued During Period, Value, Employee Benefit Plan

85

$ 1

84

Stock Issued During Period, Shares, Restricted Stock Award, Gross

67

Stock Issued During Period, Value, Restricted Stock Award, Gross

0

$ 17

(17)

APIC, Share-based Payment Arrangement, Increase for Cost Recognition

6,147

6,147

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

(25)

25

Adjustments to Additional Paid in Capital, Other

(1,393)

(1,393)

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

Stock Issued During Period, Shares, New Issues

83,397

Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest

318,611

$ 16,679

212,986

(742,844)

966,751

(134,961)

(3,209)

3,209

Adoption of Accounting Standards

$ 966,751

Stockholders' Equity Note Disclosure [Text Block]

The following table illustrates the changes in the balances of each component of shareholders' equity for the three months ended November 30, 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, 2022	83,397	$	16,679	$	212,986	$	(742,844)	$	966,751	$	(134,961)	$	(3,209)	$	3,209	$	318,611
Net earnings	—	—		—		—		7,453		—		—		—		7,453
Other comprehensive loss, net of tax	—	—		—		—		—		6,024		—		—		6,024
Stock contribution to employee benefit plans and other	3	1		41		—		—		—		—		—		42
Vesting of equity awards	84	17		(17)		—		—		—		—		—		—
Stock based compensation expense	—	—		2,155		—		—		—		—		—		2,155
Stock option exercises	42	8		922		—		—		—		—		—		930
Tax effect related to net share settlement of equity awards	—	—		(969)		—		—		—		—		—		(969)
Stock issued to, acquired for and distributed from rabbi trust	3	1		76		—		—		—		(30)		30		77
Balance at November 30, 2022	83,529	$	16,706	$	215,194	$	(742,844)	$	974,204	$	(128,937)	$	(3,239)	$	3,239	$	334,323

The following table illustrates the changes in the balances of each component of shareholders' equity for the three months ended November 30, 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, 2021	83,022	$	16,604	$	202,971	$	(667,732)	$	953,339	$	(92,984)	$	(3,067)	$	3,067	$	412,198
Net earnings	—	—		—		—		2,788		—		—		—		2,788
Other comprehensive income, net of tax	—	—		—		—		—		(10,044)		—		—		(10,044)
Stock contribution to employee benefit plans and other	2	1		84		—		—		—		—		—		85
Vesting of equity awards	67	17		(17)		—		—		—		—		—		—
Stock based compensation expense	—	—		6,147		—		—		—		—		—		6,147
Tax effect related to net share settlement of equity awards	—	—		(1,393)		—		—		—		—		—		(1,393)
Stock issued to, acquired for and distributed from rabbi trust	1	—		25		—		—		—		(25)		25		25
Balance at November 30, 2021	83,092	$	16,622	$	207,817	$	(667,732)	$	956,127	$	(103,028)	$	(3,092)	$	3,092	$	409,806

Net (loss) earnings

$ 7,453

7,453

Other Comprehensive (Loss) Income, Net of Tax

6,024

6,024

Stock Issued During Period, Shares, Employee Benefit Plan

3

Stock Issued During Period, Value, Employee Benefit Plan

42

$ 1

41

Stock Issued During Period, Shares, Restricted Stock Award, Gross

84

Stock Issued During Period, Value, Restricted Stock Award, Gross

0

$ 17

(17)

APIC, Share-based Payment Arrangement, Increase for Cost Recognition

2,155

2,155

Stock Issued To Acquired For And Distributed From Rabbi Trust

3

Stock Value Issued to Acquired For and Distributed From Rabbi Trust

77

$ 1

76

(30)

30

Adjustments to Additional Paid in Capital, Other

(969)

(969)

Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture

42

Stock Issued During Period, Value, Stock Options Exercised

930

$ 8

922

Stock Issued During Period, Shares, New Issues

83,529

Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest

334,323

$ 16,706

$ 215,194

$ (742,844)

$ 974,204

$ (128,937)

$ (3,239)

$ 3,239

Adoption of Accounting Standards

$ 974,204

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Basis of Presentation

3 Months Ended

Nov. 30, 2022

Accounting Policies [Abstract]

Basis of Presentation

Note 1. Basis of Presentation

General

Enerpac Tool Group Corp. ("Company") is a premier industrial tools, services, technology and solutions company serving a broad and diverse set of customers in more than 100 countries. The Company has one reportable segment, the Industrial Tools & Services Segment ("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, 2022 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 2022 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 months ended November 30, 2022 are not necessarily indicative of the results that may be expected for the entire fiscal year ending August 31, 2023.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, many countries, including the 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 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):

	November 30, 2022		August 31, 2022
Foreign currency translation adjustments	$	110,137	$	116,078
Pension and other postretirement benefit plans, net of tax	18,800		18,883
Accumulated other comprehensive loss	$	128,937	$	134,961

Property Plant and Equipment

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

	November 30, 2022		August 31, 2022
Land, buildings and improvements	$	14,451	$	14,121
Machinery and equipment	144,963		141,571
Gross property, plant and equipment	159,414		155,692
Less: Accumulated depreciation	(117,630)		(114,320)
Property, plant and equipment, net	$	41,784	$	41,372

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Revenue Recognition Revenue from Contract Customers (Notes)

3 Months Ended

Nov. 30, 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 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 13, "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 November 30,
	2022		2021
Revenues recognized at point in time	$	109,903	$	100,174
Revenues recognized over time	29,479		30,729
Total	$	139,382	$	130,903

Contract Balances

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

	November 30, 2022		August 31, 2022
Receivables, which are included in accounts receivable, net	$	97,707	$	106,747
Contract assets, which are included in other current assets	1,398		2,397
Contract liabilities, which are included in other current liabilities	3,156		2,804

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 be collected in the future and records the appropriate provision. The allowance for doubtful accounts was $17.3 million and $17.5 million at November 30, 2022 and August 31, 2022, respectively.

As indicated in the "Concentration of Credit Risk" section below, as of November 30, 2022 the Company was exposed to a concentration of credit risk with an agent as a result of its continued payment delinquency. As of November 30, 2022 the Company has a reserve of $13.2 million based on the consideration of the factors listed below, which fully reserves for the outstanding accounts receivable balance for this agent. The allowance for doubtful accounts, for this particular agent as of November 30, 2022 represents management's best estimate of the amount probable of collection and considers various factors with the respect to this matter, including, but not limited to, (i) the lack of payment by the agent since the fiscal quarter ended February 28, 2021, (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 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.

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 November 30, 2022, the Company was exposed to a concentration of credit risk as a result of the payment delinquency of one of our agents whose accounts receivable represent 11.3% of the Company's outstanding accounts receivable. As of November 30, 2022, the Company has fully reserved for the amounts due from this agent.

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 November 30, 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 long-term customer contracts (project durations of greater than three months) and are recognized over time. The Company estimates that substantially all of the $3.2 million will be recognized in net sales from satisfying those performance obligations within the next twelve months.

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)

3 Months Ended

Nov. 30, 2022

Restructuring and Related Activities [Abstract]

Restructuring and Related Activities Disclosure [Text Block]

Note 4. 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 Company's operating structure by the Company's new President and Chief Executive Officer (hired effective October 2021), the Company recorded $2.7 million of charges in the three months ended November 30, 2021 in order to further simplify and streamline the organizational structure. The total cumulative charges for the 2019 plan, which ended in the the third quarter of fiscal year 2022, were $18.0 million.

On June 27, 2022, the Company approved a new restructuring plan in connection with the initiatives identified as part of the ASCEND transformation program (see Note 3, “ASCEND Transformation Program”) to drive greater efficiency and productivity in global selling, general and administrative resources. The total costs of this plan were then estimated at $6 to $10 million, constituting predominately severance and other employee-related costs to be incurred as cash expenditures impacting both IT&S and Corporate. On September 23, 2022, the Company approved an updated restructuring plan. The costs of this updated plan (which includes the amounts for the plan approved in June) are estimated at $10 to $15 million. These costs are expected to be incurred over the expected duration of the transformation program, ending in the fourth quarter of fiscal year 2024. For the three months ended November 30, 2022, the Company recorded $1 million of restructuring charges associated with the ASCEND transformation program.

The following summarizes restructuring reserve activity (which for the three months ended November 30, 2021 excludes $0.7 million and $0.5 million of charges associated with the 2019 Plan for IT&S and Corporate, respectively, 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):

	Three Months Ended November 30, 2022
	2019 Plan				ASCEND Plan
	IT&S		Corporate		IT&S		Corporate
Balance as of August 31, 2022	$	212	$	6	$	2,008	$	797
Restructuring charges	—		—		944		38
Cash payments	(19)		—		(1,211)		(117)
Impact of changes in foreign currency rates	4		—		67		—
Balance as of November 30, 2022	$	197	$	6	$	1,808	$	718

	Three Months Ended November 30, 2021
	IT&S		Corporate
Balance as of August 31, 2021	$	1,737	$	26
Restructuring charges	874		695
Cash payments	(609)		(8)
Impact of changes in foreign currency rates	(46)		—
Balance as of November 30, 2021	$	1,956	$	713

Total restructuring charges (inclusive of the Other segment) were $1.0 million and $2.7 million in the three months ended November 30, 2022 and 2021, respectively, being reported in "Restructuring charges."

ASCEND Transformation Program

Note 3. ASCEND Transformation Program

In March 2022, the Company announced the launch of ASCEND, a new transformation program focused on driving accelerated earnings growth and efficiency across the business with the goal of delivering an incremental $40 to $50 million of annual operating profit once fully implemented. As part of ASCEND, the Company is focusing on the following key initiatives: (i) accelerating organic growth go-to-market strategies, (ii) improving operational excellence and production efficiency by utilizing a lean approach and (iii) driving greater efficiency and productivity in SG&A by better leveraging resources to create a more efficient and agile organization.

The Company is implementing the program and anticipates investing approximately $60 to $65 million (as disclosed in Note 4, "Restructuring Charges," approximately $10 to $15 million of these investments will be in the form of restructuring charges) over the life of the program, which is expected to be finalized as we exit fiscal 2024. Elements of these investments could include such cash costs as capital expenditures, restructuring costs, third-party support, and incentive costs. Total program expenses were approximately $10.4 million for the three months ended November 30, 2022, of which $9.4 million were recorded within SG&A expenses and included third-party support costs and $1.0 million were recorded within restructuring expenses (see Note 4, "Restructuring Charges," below).

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Restructuring and Related Activities

3 Months Ended

Nov. 30, 2022

Restructuring and Related Activities [Abstract]

ASCEND Transformation Program

Note 3. ASCEND Transformation Program

In March 2022, the Company announced the launch of ASCEND, a new transformation program focused on driving accelerated earnings growth and efficiency across the business with the goal of delivering an incremental $40 to $50 million of annual operating profit once fully implemented. As part of ASCEND, the Company is focusing on the following key initiatives: (i) accelerating organic growth go-to-market strategies, (ii) improving operational excellence and production efficiency by utilizing a lean approach and (iii) driving greater efficiency and productivity in SG&A by better leveraging resources to create a more efficient and agile organization.

The Company is implementing the program and anticipates investing approximately $60 to $65 million (as disclosed in Note 4, "Restructuring Charges," approximately $10 to $15 million of these investments will be in the form of restructuring charges) over the life of the program, which is expected to be finalized as we exit fiscal 2024. Elements of these investments could include such cash costs as capital expenditures, restructuring costs, third-party support, and incentive costs. Total program expenses were approximately $10.4 million for the three months ended November 30, 2022, of which $9.4 million were recorded within SG&A expenses and included third-party support costs and $1.0 million were recorded within restructuring expenses (see Note 4, "Restructuring Charges," below).

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

3 Months Ended

Nov. 30, 2022

Discontinued Operations and Disposal Groups [Abstract]

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

Note 5. 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 "Earnings (loss) from discontinued operations, net of income taxes" in the Condensed Consolidated Statements of Earnings for all periods presented. All other discontinued operations activity included within the Condensed Consolidated Statements of Earnings 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 "Earnings (loss) from discontinued operations, net of income taxes" within the Condensed Consolidated Statements of Earnings (in thousands) :

	Three Months Ended November 30,
	2022		2021
Selling, general and administrative expenses	$	5	$	503
Impairment & divestiture benefit	(1,329)		—
Operating profit (loss)	1,324		(503)
Other loss, net	—		—
Earnings (loss) before income tax expense (benefit)	1,324		(503)
Income tax expense (benefit)	280		(106)
Earnings (loss) from discontinued operations, net of income taxes	$	1,044	$	(397)

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Goodwill and Other Intangible Assets

3 Months Ended

Nov. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Note 6. 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 three months ended November 30, 2022 are as follows (in thousands):

	IT&S		Other		Total
Balance as of August 31, 2022	$	246,740	$	11,209	$	257,949
Impact of changes in foreign currency rates	3,710		—		3,710
Balance as of November 30, 2022	$	250,450	$	11,209	$	261,659

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

		November 30, 2022						August 31, 2022
	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	$	136,521	$	119,590	$	16,931	$	135,101	$	117,275	$	17,826
Patents	11	13,849		13,248		601		13,708		13,104		604
Trademarks and tradenames	12	3,164		2,387		777		3,132		2,329		803
Indefinite lived intangible assets:
Tradenames	N/A	22,722		—		22,722		22,274		—		22,274
		$	176,256	$	135,225	$	41,031	$	174,215	$	132,708	$	41,507

The Company estimates that amortization expense will be $3.9 million for the remaining nine months of fiscal 2023. Amortization expense for future years is estimated to be: $3.7 million in fiscal 2024, $3.0 million in fiscal 2025, $1.8 million in both fiscal 2026 and 2027, $1.6 million in fiscal 2028 and $2.5 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.

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Product Warranty Costs

3 Months Ended

Nov. 30, 2022

Guarantees [Abstract]

Product Warranty Costs

Note 7. 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 three months ended November 30, 2022 and 2021, respectively (in thousands):

	Three Months Ended November 30,
	2022		2021
Beginning balance	$	1,140	$	1,300
Provision for warranties	234		395
Warranty payments and costs incurred	(256)		(230)
Impact of changes in foreign currency rates	18		(31)
Ending balance	$	1,136	$	1,434

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Debt

3 Months Ended

Nov. 30, 2022

Debt Disclosure [Abstract]

Debt

Note 8. Debt

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

	November 30, 2022		August 31, 2022
Previous Senior Credit Facility
Short-term debt	$	—	$	4,000
Revolver	—		200,000
New Senior Credit Facility
Revolver	3,000		—
Term Loan	200,000		—
Total Senior Indebtedness	203,000		204,000
Less: Current maturities of long-term debt	(1,875)		—
Short-term debt	—		(4,000)
Debt issuance costs	(766)		—
Total long-term debt, less current maturities	$	200,359	$	200,000

Senior Credit Facility

Prior to refinancing the Company's senior credit facility on September 9, 2022, the Company's previous senior credit facility matured in March 2024, and provided a $400 million revolving line of credit, a $200 million term loan and a $300 million accordion. Borrowings bore 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 was 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 previous senior credit facility contained two financial covenants, which were a maximum leverage ratio of 3.75:1 and a minimum interest coverage ratio of 3.5:1. Certain transactions resulted in 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.

On September 9, 2022, the Company refinanced its previous senior credit facility with a new $600 million senior credit facility, comprised of a $400 million revolving line of credit and a $200 million term loan, which will mature in September 2027. The Company has the option to request up to $300 million of additional revolving commitments and/or term loans under the new facility, subject to customary conditions, including the commitment of the participating lenders. The new facility replaces LIBOR with adjusted term SOFR as the interest rate benchmark and provides for interest rate margins above adjusted term SOFR ranging from 1.125% to 1.875% per annum depending on the Company’s net leverage ratio. Borrowings under the new facility initially bear interest at adjusted term SOFR plus 1.125% per annum.

In addition, the new facility contains financial covenants requiring the Company to not permit (i) the net leverage ratio, determined as of the end of each of its fiscal quarters, to exceed 3.75 to 1.00 (or, at the Company’s election and subject to certain conditions, 4.25 to 1.00 for the covenants period during which certain material acquisitions occur and the next succeeding four testing periods) or (ii) the interest coverage ratio, determined as of the end of each of its fiscal quarters, to be less than 3.00 to 1.00. Borrowings under the new facility are secured by substantially all personal property assets of the Company and its domestic subsidiary guarantors (other than certain specified excluded assets) and certain of the equity interests of certain subsidiaries of the Company. The Company was in compliance with all financial covenants under the new facility at November 30, 2022.

At November 30, 2022, there was $3.0 million of borrowings under the revolving line of credit and $393.4 million available under the revolving line of credit facility after reduction for $3.6 million of outstanding letters of credit issued under the new facility.

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Fair Value Measurement

3 Months Ended

Nov. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurement

Note 9. 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 November 30, 2022 and August 31, 2022 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 $0.3 million and less than $0.1 million at November 30, 2022 and August 31, 2022, respectively. 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.

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Derivatives

3 Months Ended

Nov. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Fair Value [Text Block]

Note 10. 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 expense" in the Condensed Consolidated Statements of Earnings). The U.S. dollar equivalent notional value of these short duration foreign currency exchange contracts was $22.0 million and $16.7 million at November 30, 2022 and August 31, 2022, respectively. The fair value of outstanding foreign currency exchange contracts was a net liability of $0.3 million and less than $0.1 million at November 30, 2022 and August 31, 2022, respectively. Net foreign currency gain (loss) (included in "Other expense" in the Condensed Consolidated Statements of Earnings) related to these derivative instruments were as follows (in thousands):

	Three Months Ended November 30,
	2022		2021
Foreign currency loss, net	$	(636)	$	(181)

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Capital Stock and Share Repurchase

3 Months Ended

Nov. 30, 2022

Earnings Per Share [Abstract]

Capital Stock and Share Repurchase

Note 11. 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 26,558,965 shares of common stock for $742.8 million. The Company suspended the initial share repurchase program in response to the COVID-19 pandemic in the third quarter of fiscal 2020. In March 2022, the Company's Board of Directors rescinded its prior share repurchase authorization and approved a new share repurchase program authorizing the repurchase of a total of 10,000,000 shares of the Company's outstanding common stock. The Company did not repurchase shares in either of the three months ended November 30, 2022 or 2021. As of November 30, 2022, the maximum number of shares that may yet be purchased under the program is 6,240,265 shares.

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

	Three Months Ended November 30,
	2022		2021
Numerator:
Net earnings from continuing operations	$	6,409	$	3,185
Net earnings (loss) from discontinued operations	1,044		(397)
Net earnings	$	7,453	$	2,788
Denominator:
Weighted average common shares outstanding - basic	56,886		60,261
Net effect of dilutive securities - stock based compensation plans	431		360
Weighted average common shares outstanding - diluted	57,317		60,621
Earnings per share from continuing operations:
Basic	$	0.11	$	0.05
Diluted	$	0.11	$	0.05
Earnings (loss) per share from discontinued operations:
Basic	$	0.02	$	(0.01)
Diluted	$	0.02	$	(0.01)
Earnings per share:*
Basic	$	0.13	$	0.05
Diluted	$	0.13	$	0.05
Anti-dilutive securities from stock based compensation plans (excluded from earnings per share calculation)	818		846
*The total of Earnings per share from continuing operations and Earnings (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 November 30, 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, 2022	83,397	$	16,679	$	212,986	$	(742,844)	$	966,751	$	(134,961)	$	(3,209)	$	3,209	$	318,611
Net earnings	—	—		—		—		7,453		—		—		—		7,453
Other comprehensive loss, net of tax	—	—		—		—		—		6,024		—		—		6,024
Stock contribution to employee benefit plans and other	3	1		41		—		—		—		—		—		42
Vesting of equity awards	84	17		(17)		—		—		—		—		—		—
Stock based compensation expense	—	—		2,155		—		—		—		—		—		2,155
Stock option exercises	42	8		922		—		—		—		—		—		930
Tax effect related to net share settlement of equity awards	—	—		(969)		—		—		—		—		—		(969)
Stock issued to, acquired for and distributed from rabbi trust	3	1		76		—		—		—		(30)		30		77
Balance at November 30, 2022	83,529	$	16,706	$	215,194	$	(742,844)	$	974,204	$	(128,937)	$	(3,239)	$	3,239	$	334,323

The following table illustrates the changes in the balances of each component of shareholders' equity for the three months ended November 30, 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, 2021	83,022	$	16,604	$	202,971	$	(667,732)	$	953,339	$	(92,984)	$	(3,067)	$	3,067	$	412,198
Net earnings	—	—		—		—		2,788		—		—		—		2,788
Other comprehensive income, net of tax	—	—		—		—		—		(10,044)		—		—		(10,044)
Stock contribution to employee benefit plans and other	2	1		84		—		—		—		—		—		85
Vesting of equity awards	67	17		(17)		—		—		—		—		—		—
Stock based compensation expense	—	—		6,147		—		—		—		—		—		6,147
Tax effect related to net share settlement of equity awards	—	—		(1,393)		—		—		—		—		—		(1,393)
Stock issued to, acquired for and distributed from rabbi trust	1	—		25		—		—		—		(25)		25		25
Balance at November 30, 2021	83,092	$	16,622	$	207,817	$	(667,732)	$	956,127	$	(103,028)	$	(3,092)	$	3,092	$	409,806

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Income Taxes

3 Months Ended

Nov. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Note 12. 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 November 30,
	2022			2021
Earnings from continuing operations before income tax expense	$	8,792		$	4,966
Income tax expense	2,383			1,781
Effective income tax rate	27.1		%	35.9		%

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 foreign rate differentials, 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 and Foreign-Derived Intangible Income provisions.

The effective tax rate for the three months ended November 30, 2022 was 27.1%, compared to 35.9% for the comparable prior-year period. The effective tax rate in each time period was 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 November 30, 2022 was primarily due to tax benefits driven by revaluing tax assets due to tax rate changes.

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Segment Information

3 Months Ended

Nov. 30, 2022

Segment Reporting [Abstract]

Segment Information

Note 13. 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 infrastructure, industrial maintenance, repair and operations, oil & gas, mining, alternative and renewable energy, civil construction and other markets. The Other 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 November 30,
	2022		2021
Net Sales by Reportable Segment & Product Line
IT&S Segment
Product	$	98,917	$	92,350
Service & Rental	28,380		28,963
	127,297		121,313
Other Segment	12,085		9,590
	$	139,382	$	130,903
Operating Profit (Loss)
IT&S Segment	$	26,640	$	18,064
Other Segment	1,424		(1,257)
General Corporate	(15,755)		(10,400)
	$	12,309	$	6,407

	November 30, 2022		August 31, 2022
Assets
IT&S Segment	$	615,134	$	618,412
Other Segment	45,338		46,428
General Corporate	113,929		92,472
	$	774,401	$	757,312

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 and 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

3 Months Ended

Nov. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Contingencies and Litigation

Note 14. Commitments and Contingencies

The Company had outstanding letters of credit of $9.2 million and $10.7 million at November 30, 2022 and August 31, 2022, 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 November 30, 2022 were $3.2 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 supported the Company to record an expense in the fiscal year-ended August 31, 2021, representing the low end of a reasonable range of financial penalties the Company may incur as no other point within the range was deemed more probable. The Company has not adjusted its estimate of financial penalties as a result of the completion of the investigation in the three months ended November 30, 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

3 Months Ended

Nov. 30, 2022

Leases [Abstract]

Lessee, Operating Leases [Text Block]

Note 15. 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 three months ended November 30, 2022.

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

	Three Months Ended November 30,
	2022		2021
Lease Cost:
Operating lease cost	$	3,273	$	3,725
Short-term lease cost	494		450
Variable lease cost	1,115		903

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

	Three Months Ended November 30,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,255	$	3,611
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	483		810

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Basis of Presentation Property, Plant and Equipment

3 Months Ended

Nov. 30, 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):

	November 30, 2022		August 31, 2022
Land, buildings and improvements	$	14,451	$	14,121
Machinery and equipment	144,963		141,571
Gross property, plant and equipment	159,414		155,692
Less: Accumulated depreciation	(117,630)		(114,320)
Property, plant and equipment, net	$	41,784	$	41,372

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Basis of Presentation Basis of Presentation (Policies)

3 Months Ended

Nov. 30, 2022

Accounting Policies [Abstract]

New Accounting Pronouncements, Policy [Policy Text Block]

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):

	November 30, 2022		August 31, 2022
Foreign currency translation adjustments	$	110,137	$	116,078
Pension and other postretirement benefit plans, net of tax	18,800		18,883
Accumulated other comprehensive loss	$	128,937	$	134,961

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):

	November 30, 2022		August 31, 2022
Land, buildings and improvements	$	14,451	$	14,121
Machinery and equipment	144,963		141,571
Gross property, plant and equipment	159,414		155,692
Less: Accumulated depreciation	(117,630)		(114,320)
Property, plant and equipment, net	$	41,784	$	41,372

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Revenue Recognition Disaggregation of Revenues (Tables)

3 Months Ended

Nov. 30, 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 November 30,
	2022		2021
Revenues recognized at point in time	$	109,903	$	100,174
Revenues recognized over time	29,479		30,729
Total	$	139,382	$	130,903

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

3 Months Ended

Nov. 30, 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):

	November 30, 2022		August 31, 2022
Receivables, which are included in accounts receivable, net	$	97,707	$	106,747
Contract assets, which are included in other current assets	1,398		2,397
Contract liabilities, which are included in other current liabilities	3,156		2,804

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Restructuring Charges (Tables)

3 Months Ended

Nov. 30, 2022

Restructuring and Related Activities [Abstract]

Restructuring and Related Costs [Table Text Block]

The following summarizes restructuring reserve activity (which for the three months ended November 30, 2021 excludes $0.7 million and $0.5 million of charges associated with the 2019 Plan for IT&S and Corporate, respectively, 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):

	Three Months Ended November 30, 2022
	2019 Plan				ASCEND Plan
	IT&S		Corporate		IT&S		Corporate
Balance as of August 31, 2022	$	212	$	6	$	2,008	$	797
Restructuring charges	—		—		944		38
Cash payments	(19)		—		(1,211)		(117)
Impact of changes in foreign currency rates	4		—		67		—
Balance as of November 30, 2022	$	197	$	6	$	1,808	$	718

	Three Months Ended November 30, 2021
	IT&S		Corporate
Balance as of August 31, 2021	$	1,737	$	26
Restructuring charges	874		695
Cash payments	(609)		(8)
Impact of changes in foreign currency rates	(46)		—
Balance as of November 30, 2021	$	1,956	$	713

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Discontinued Operations & Other Divestiture Charges Discontinued Operations Balance Sheet and Statement of Operations (Tables) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Discontinued Operations and Disposal Groups [Abstract]
Net (Loss) Earnings from Discontinued Operations	$ (1,044)	$ 397

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

3 Months Ended

Nov. 30, 2022

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations [Table Text Block]

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

	Three Months Ended November 30,
	2022		2021
Selling, general and administrative expenses	$	5	$	503
Impairment & divestiture benefit	(1,329)		—
Operating profit (loss)	1,324		(503)
Other loss, net	—		—
Earnings (loss) before income tax expense (benefit)	1,324		(503)
Income tax expense (benefit)	280		(106)
Earnings (loss) from discontinued operations, net of income taxes	$	1,044	$	(397)

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Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Nov. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The changes in the carrying amount of goodwill for the three months ended November 30, 2022 are as follows (in thousands):

	IT&S		Other		Total
Balance as of August 31, 2022	$	246,740	$	11,209	$	257,949
Impact of changes in foreign currency rates	3,710		—		3,710
Balance as of November 30, 2022	$	250,450	$	11,209	$	261,659

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):

		November 30, 2022						August 31, 2022
	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	$	136,521	$	119,590	$	16,931	$	135,101	$	117,275	$	17,826
Patents	11	13,849		13,248		601		13,708		13,104		604
Trademarks and tradenames	12	3,164		2,387		777		3,132		2,329		803
Indefinite lived intangible assets:
Tradenames	N/A	22,722		—		22,722		22,274		—		22,274
		$	176,256	$	135,225	$	41,031	$	174,215	$	132,708	$	41,507

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Product Warranty Costs (Tables)

3 Months Ended

Nov. 30, 2022

Guarantees [Abstract]

Schedule of Product Warranty Liability

The following summarizes the changes in product warranty reserves for the three months ended November 30, 2022 and 2021, respectively (in thousands):

	Three Months Ended November 30,
	2022		2021
Beginning balance	$	1,140	$	1,300
Provision for warranties	234		395
Warranty payments and costs incurred	(256)		(230)
Impact of changes in foreign currency rates	18		(31)
Ending balance	$	1,136	$	1,434

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Debt (Tables)

3 Months Ended

Nov. 30, 2022

Debt Disclosure [Abstract]

Long-Term Indebtedness

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

	November 30, 2022		August 31, 2022
Previous Senior Credit Facility
Short-term debt	$	—	$	4,000
Revolver	—		200,000
New Senior Credit Facility
Revolver	3,000		—
Term Loan	200,000		—
Total Senior Indebtedness	203,000		204,000
Less: Current maturities of long-term debt	(1,875)		—
Short-term debt	—		(4,000)
Debt issuance costs	(766)		—
Total long-term debt, less current maturities	$	200,359	$	200,000

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Derivatives Derivatives (Tables)

3 Months Ended

Nov. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

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

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

	Three Months Ended November 30,
	2022		2021
Foreign currency loss, net	$	(636)	$	(181)

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Earnings Per Share (Tables)

3 Months Ended

Nov. 30, 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 November 30,
	2022		2021
Numerator:
Net earnings from continuing operations	$	6,409	$	3,185
Net earnings (loss) from discontinued operations	1,044		(397)
Net earnings	$	7,453	$	2,788
Denominator:
Weighted average common shares outstanding - basic	56,886		60,261
Net effect of dilutive securities - stock based compensation plans	431		360
Weighted average common shares outstanding - diluted	57,317		60,621
Earnings per share from continuing operations:
Basic	$	0.11	$	0.05
Diluted	$	0.11	$	0.05
Earnings (loss) per share from discontinued operations:
Basic	$	0.02	$	(0.01)
Diluted	$	0.02	$	(0.01)
Earnings per share:*
Basic	$	0.13	$	0.05
Diluted	$	0.13	$	0.05
Anti-dilutive securities from stock based compensation plans (excluded from earnings per share calculation)	818		846
*The total of Earnings per share from continuing operations and Earnings (loss) per share from discontinued operations may not equal Earnings per share due to rounding.

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Income Taxes Income Taxes (Tables)

3 Months Ended

Nov. 30, 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 November 30,
	2022			2021
Earnings from continuing operations before income tax expense	$	8,792		$	4,966
Income tax expense	2,383			1,781
Effective income tax rate	27.1		%	35.9		%

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Segment Information (Tables)

3 Months Ended

Nov. 30, 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 November 30,
	2022		2021
Net Sales by Reportable Segment & Product Line
IT&S Segment
Product	$	98,917	$	92,350
Service & Rental	28,380		28,963
	127,297		121,313
Other Segment	12,085		9,590
	$	139,382	$	130,903
Operating Profit (Loss)
IT&S Segment	$	26,640	$	18,064
Other Segment	1,424		(1,257)
General Corporate	(15,755)		(10,400)
	$	12,309	$	6,407

	November 30, 2022		August 31, 2022
Assets
IT&S Segment	$	615,134	$	618,412
Other Segment	45,338		46,428
General Corporate	113,929		92,472
	$	774,401	$	757,312

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Leases Components of Lease Expense (Tables)

3 Months Ended

Nov. 30, 2022

Components of Lease Expense [Abstract]

Lease, Cost [Table Text Block]

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

	Three Months Ended November 30,
	2022		2021
Lease Cost:
Operating lease cost	$	3,273	$	3,725
Short-term lease cost	494		450
Variable lease cost	1,115		903

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Leases Supplemental Cash Flow Information Related to Leases (Tables)

3 Months Ended

Nov. 30, 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):

	Three Months Ended November 30,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,255	$	3,611
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	483		810

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Basis of Presentation Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Nov. 30, 2022	Aug. 31, 2022
Property, Plant and Equipment [Line Items]
Land, buildings and improvements	$ 14,451	$ 14,121
Machinery and equipment	144,963	141,571
Gross Property, Plant and Equipment	159,414	155,692
Less: Accumulated Depreciation	(117,630)	(114,320)
Property, Plant and Equipment, Net	$ 41,784	$ 41,372

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Basis of Presentation Basis of Presentation (Details) - USD ($) $ in Thousands	Nov. 30, 2022	Aug. 31, 2022	Nov. 30, 2021	Aug. 31, 2021
Condensed Statement of Income Captions [Line Items]
Foreign currency translation adjustments	$ 110,137	$ 116,078
Pension and other postretirement benefit plans, net of tax	18,800	18,883
Total shareholders’ equity	(334,323)	(318,611)	$ (409,806)	$ (412,198)
AOCI Attributable to Parent [Member]
Condensed Statement of Income Captions [Line Items]
Total shareholders’ equity	$ 128,937	$ 134,961	$ 103,028	$ 92,984

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Revenue Recognition Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Disaggregation of Revenue [Line Items]
Revenues	$ 139,382	$ 130,903
Revenue Recognized at a Point in Time [Member]
Disaggregation of Revenue [Line Items]
Revenues	109,903	100,174
Transferred over Time [Member]
Disaggregation of Revenue [Line Items]
Revenues	$ 29,479	$ 30,729

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Revenue Recognition Contract with Customer, Asset and Liability (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Nov. 30, 2022	Aug. 31, 2022
Revenue from Contract with Customer [Abstract]
Accounts Receivable, Allowance for Credit Loss, Current	$ 17,300	$ 17,500
Accounts receivable, net	97,707	106,747
Contract assets	1,398	2,397
Contract liabilities	3,156	2,804
Revenue, remaining performance obligation, within next twelve months	$ 3,200
Accounts Receivable, Allowance for Credit Loss, Period Increase (Decrease)		$ 13,200
Concentration Risk, Customer	11.3

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Restructuring Charges (Details) - USD ($) $ in Thousands		3 Months Ended		36 Months Ended
	Jun. 27, 2022	Nov. 30, 2022	Nov. 30, 2021	May 31, 2022
Restructuring Reserve [Roll Forward]
Restructuring Charges		$ 982	$ 2,737
Anticipated ASCEND Transformation Program Restructuring Charges - Maximum	$ 6,000	10,000
Anticipated ASCEND Transformation Program Restructuring Charges - Minimum	$ 10,000	15,000
ASCEND Restructuring Plan
Restructuring Reserve [Roll Forward]
Restructuring Charges		1,000
Industrial Tools & Services [Member] [Domain]
Restructuring Reserve [Roll Forward]
Other non-cash uses of reserve			(700)
Industrial Tools & Services [Member] [Domain] | 2019 Restructuring Plan
Restructuring Reserve [Roll Forward]
Beginning Balance		212	1,737
Restructuring Charges		0	874
Cash payments		(19)	609
Impact of changes in foreign currency rates		4	(46)
Ending Balance		197	1,956
Industrial Tools & Services [Member] [Domain] | ASCEND Restructuring Plan
Restructuring Reserve [Roll Forward]
Beginning Balance		2,008
Restructuring Charges		944
Cash payments		(1,211)
Impact of changes in foreign currency rates		67
Ending Balance		1,808
Reportable Segments [Member] | 2019 Restructuring Plan
Restructuring Reserve [Roll Forward]
Restructuring Charges				$ 18,000
Corporate Segment
Restructuring Reserve [Roll Forward]
Other non-cash uses of reserve			(500)
Corporate Segment | 2019 Restructuring Plan
Restructuring Reserve [Roll Forward]
Beginning Balance		6	26
Restructuring Charges		0	695
Cash payments		0	8
Impact of changes in foreign currency rates		0	0
Ending Balance		6	$ 713
Corporate Segment | ASCEND Restructuring Plan
Restructuring Reserve [Roll Forward]
Beginning Balance		797
Restructuring Charges		38
Cash payments		(117)
Impact of changes in foreign currency rates		0
Ending Balance		$ 718

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ASCEND Transformation Program (Details) - USD ($) $ in Thousands		3 Months Ended
	Jun. 27, 2022	Nov. 30, 2022	Nov. 30, 2021
Restructuring and Related Activities [Abstract]
Anticipated ASCEND Transformation Program Restructuring Charges - Maximum	$ 6,000	$ 10,000
Incremental Operating Profit Maximum		50,000
Incremental Operating Profit Minimum		40,000
Anticipated ASCEND Transformation Program Restructuring Charges - Minimum	$ 10,000	15,000
Anticipated Invested Expense Minimum		60,000
Anticipated Invested Expense Maximum		65,000
ASCEND Transformation Program Costs		10,400
ASCEND Transformation Program Expenses in SG&A		9,400
Restructuring Charges		$ 982	$ 2,737

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

3 Months Ended

Oct. 31, 2019

Nov. 30, 2022

Nov. 30, 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

$ 8,792

$ 4,966

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

Note 5. 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 "Earnings (loss) from discontinued operations, net of income taxes" in the Condensed Consolidated Statements of Earnings for all periods presented. All other discontinued operations activity included within the Condensed Consolidated Statements of Earnings 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 "Earnings (loss) from discontinued operations, net of income taxes" within the Condensed Consolidated Statements of Earnings (in thousands) :

	Three Months Ended November 30,
	2022		2021
Selling, general and administrative expenses	$	5	$	503
Impairment & divestiture benefit	(1,329)		—
Operating profit (loss)	1,324		(503)
Other loss, net	—		—
Earnings (loss) before income tax expense (benefit)	1,324		(503)
Income tax expense (benefit)	280		(106)
Earnings (loss) from discontinued operations, net of income taxes	$	1,044	$	(397)

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 Income (Loss)

$ 1,324

(503)

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

0

0

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

(1,324)

503

Disposal Group, Including Discontinued Operation, General and Administrative Expense

5

503

Disposal Group Including Discontinued Operation Impairment And Divestiture Charges

$ (1,329)

$ 0

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 Divestitures Activities Discontinued Operations - Loss From Discontinued Operations (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net (Loss) Earnings from Discontinued Operations	$ (1,044)	$ 397
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	1,324	(503)
Disposal Group, Including Discontinued Operation, Other Expense	0	0
Disposal Group, Including Discontinued Operation, (Loss) Earnings Before Income Tax Benefit	1,324	(503)
Disposal Group, Including Discontinued Operation, Income Tax (Benefit) Expense	280	(106)
Net (Loss) Earnings from Discontinued Operations	$ 1,044	$ (397)

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Changes in Carrying Value of Goodwill (Details) $ in Thousands	3 Months Ended
	Nov. 30, 2022 USD ($)
Goodwill [Roll Forward]
Ending balance	$ 257,949
Impact of changes in foreign currency rates	3,710
Ending balance	261,659
Industrial Tools & Services [Member] [Domain]
Goodwill [Roll Forward]
Ending balance	246,740
Impact of changes in foreign currency rates	3,710
Ending balance	250,450
Other Operating Segment [Member]
Goodwill [Roll Forward]
Ending balance	11,209
Impact of changes in foreign currency rates	0
Ending balance	$ 11,209

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Gross Carrying Amount and Accumulated Amortization of Other Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2022	Aug. 31, 2022
Indefinite And Finite Lived Intangible Assets [Line Items]
Accumulated Amortization	$ 135,225	$ 132,708
Gross Carrying Value	176,256	174,215
Net Book Value	41,031	41,507
Tradenames
Indefinite And Finite Lived Intangible Assets [Line Items]
Gross Carrying Value	22,722	22,274
Accumulated Amortization	0	0
Net Book Value	$ 22,722	22,274
Customer relationships
Indefinite And Finite Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Years)	14 years
Gross Carrying Value	$ 136,521	135,101
Accumulated Amortization	119,590	117,275
Net Book Value	$ 16,931	17,826
Patents
Indefinite And Finite Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Years)	11 years
Gross Carrying Value	$ 13,849	13,708
Accumulated Amortization	13,248	13,104
Net Book Value	$ 601	604
Trademarks and tradenames
Indefinite And Finite Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (Years)	12 years
Gross Carrying Value	$ 3,164	3,132
Accumulated Amortization	2,387	2,329
Net Book Value	$ 777	$ 803

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Goodwill and Other Intangible Assets - Additional Information (Details) $ in Millions	Nov. 30, 2022 USD ($)
Impaired Assets [Line Items]
Finite-Lived Intangible Asset, Expected Amortization, Year One	$ 3.7
Future Amortization Expense, 2025	2.5
Future Amortization Expense, 2024	1.6
Future Amortization Expense, 2023	1.8
Future Amortization Expense, 2022	1.8
Future Amortization Expense, 2021	3.0
Future Amortization Expense, Remainder of 2020	3.9
Future Amortization Expense, 2021	3.0
Future Amortization Expense, 2022	1.8
Future Amortization Expense, 2023	1.8
Future Amortization Expense, 2024	1.6
Future Amortization Expense, 2025	$ 2.5

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Rollforward of Accrued Product Warranty Reserve (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Movement in Standard Product Warranty Accrual [Roll Forward]
Beginning balance	$ 1,140	$ 1,300
Provision for warranties	234	395
Warranty Payments and costs incurred	(256)	(230)
Impact of changes in foreign currency rates	18	(31)
Ending balance	$ 1,136	$ 1,434

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Long-Term Indebtedness (Details) - USD ($) $ in Thousands	Nov. 30, 2022	Aug. 31, 2022
Debt Instrument [Line Items]
Long-term Debt	$ 203,000	$ 204,000
Long-term debt, net	200,359	200,000
Long-term Debt, Current Maturities	1,875	0
Debt Issuance Costs, Net	766	0
Short-Term Debt	0	4,000
Repayments of Short-Term Debt	0	(4,000)
Senior Credit Facility - Term Loan | Debt Instrument, Name [Domain]
Debt Instrument [Line Items]
Long-term Debt	200,000	0
Revolving Credit Facility
Debt Instrument [Line Items]
Long-term Debt	3,000	0
Long-term debt, net	$ 0	$ 200,000

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Debt - Additional Information (Details) $ in Thousands			3 Months Ended
	Sep. 09, 2022 USD ($)	Mar. 29, 2019 USD ($)	Nov. 30, 2022 USD ($)	Nov. 30, 2021 USD ($)	Aug. 31, 2022 USD ($)
Debt Instrument [Line Items]
Borrowings on Revolving Credit			$ 14,000	$ 5,000
Outstanding letters of credit			9,200		$ 10,700
Senior Credit Facilty	$ 600,000
Long-term debt, net			200,359		200,000
Long-term Debt			203,000		204,000
Senior Credit Facility - Term Loan
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	200,000	$ 200,000
Senior credit facility expansion option, available	300,000
Revolving Credit Facility
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 400,000	$ 400,000
Long-term debt, net			0		200,000
Long-term Debt			3,000		0
Senior Credit Facility - Revolver
Debt Instrument [Line Items]
Outstanding letters of credit			3,600
Long-term debt, net			3,000
Debt Instrument, Unused Borrowing Capacity, Amount			393,400
Debt Instrument, Name [Domain] | Senior Credit Facility - Term Loan
Debt Instrument [Line Items]
Long-term Debt			$ 200,000		$ 0
Minimum
Debt Instrument [Line Items]
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage		0.15%
Fixed Charge Coverage Ratio		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%
Minimum | Senior Credit Facility - Term Loan
Debt Instrument [Line Items]
Leverage ratio			1.00
Interest Coverage Ratio			100.00%
Minimum | Senior Credit Facility - Term Loan | Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.125%
Maximum
Debt Instrument [Line Items]
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage		0.30%
Leverage ratio		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%
Maximum | Senior Credit Facility - Term Loan
Debt Instrument [Line Items]
Leverage ratio			3.75
Interest Coverage Ratio			300.00%
Maximum | Senior Credit Facility - Term Loan | Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.875%
Accordion [Domain]
Debt Instrument [Line Items]
Senior credit facility expansion option, available		$ 300,000

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Fair Value Measurement - Additional Information (Details) - USD ($) $ in Millions	Nov. 30, 2022	Aug. 31, 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign Currency Contract, Liability/Asset, Fair Value Disclosure	$ (0.3)	$ (0.1)
Long-term Debt	203.0	204.0
Revolving Credit Facility
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term Debt	$ 3.0	$ 0.0

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Derivatives Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021	Aug. 31, 2022
Derivative [Line Items]
Foreign Currency Contract, Liability/Asset, Fair Value Disclosure	$ (300)		$ (100)
Loss on Foreign Currency Fair Value Hedge Derivatives and Not Designated as Hedging Instruments at Fair Value	(636)	$ (181)
Long-term Debt	203,000		204,000
Fair Value Hedging [Member]
Derivative [Line Items]
Derivative, Fair Value, Net	$ 22,000		$ 16,700

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Earnings per Share and Shareholders' Equity Share Repurchase (Details) - USD ($) $ in Thousands	3 Months Ended		123 Months Ended
	Nov. 30, 2022	Nov. 30, 2021	Nov. 30, 2021	Aug. 31, 2022	Aug. 31, 2021
Equity [Abstract]
Treasury Stock, Shares	26,558,965			26,558,965
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased	6,240,265
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ 334,323	$ 409,806	$ 409,806	$ 318,611	$ 412,198
Net (loss) earnings	7,453	2,788
Other Comprehensive (Loss) Income, Net of Tax	6,024	(10,044)
Stock Issued During Period, Value, Employee Benefit Plan	42	85
Stock Issued During Period, Value, Restricted Stock Award, Gross	0	0
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	2,155	6,147
Stock Value Issued to Acquired For and Distributed From Rabbi Trust	77	$ 25
Retained earnings	974,204			966,751
Treasury Stock, Value	$ 742,844			$ 742,844
Treasury Stock, Value, Acquired, Cost Method			$ 742,800
Stock Repurchase Program, Number of Shares Authorized to be Repurchased	10,000,000
Common Stock [Member]
Stock Issued During Period, Shares, New Issues	83,529,000	83,092,000	83,092,000	83,397,000	83,022,000
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ 16,706	$ 16,622	$ 16,622	$ 16,679	$ 16,604
Stock Issued During Period, Shares, Employee Benefit Plan	3,000	2,000
Stock Issued During Period, Value, Employee Benefit Plan	$ 1	$ 1
Stock Issued During Period, Shares, Restricted Stock Award, Gross	84,000	67,000
Stock Issued During Period, Value, Restricted Stock Award, Gross	$ 17	$ 17
Stock Issued To Acquired For And Distributed From Rabbi Trust	3,000	1,000
Stock Value Issued to Acquired For and Distributed From Rabbi Trust	$ 1	$ 0
Additional Paid-in Capital [Member]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	215,194	207,817	207,817	212,986	202,971
Stock Issued During Period, Value, Employee Benefit Plan	41	84
Stock Issued During Period, Value, Restricted Stock Award, Gross	(17)	(17)
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	2,155	6,147
Stock Value Issued to Acquired For and Distributed From Rabbi Trust	76	25
Treasury Stock [Member]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	(742,844)	(667,732)	(667,732)	(742,844)	(667,732)
Retained Earnings [Member]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	974,204	956,127	956,127	966,751	953,339
Net (loss) earnings	7,453	2,788
AOCI Attributable to Parent [Member]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	(128,937)	(103,028)	(103,028)	(134,961)	(92,984)
Other Comprehensive (Loss) Income, Net of Tax	6,024	(10,044)
Stock held in trust [member] [Member]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	(3,239)	(3,092)	(3,092)	(3,209)	(3,067)
Stock Value Issued to Acquired For and Distributed From Rabbi Trust	(30)	(25)
Deferred Compensation, Share-based Payments [Member]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	3,239	3,092	$ 3,092	$ 3,209	$ 3,067
Stock Value Issued to Acquired For and Distributed From Rabbi Trust	$ 30	$ 25

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Capital Stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Earnings Per Share [Abstract]
Net (Loss) Earnings from Continuing Operations	$ 6,409	$ 3,185
Net (Loss) Earnings from Discontinued Operations	1,044	(397)
Net (loss) earnings	$ 7,453	$ 2,788
Weighted average common shares outstanding - basic	56,886	60,261
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements	431	360
Weighted Average Common Shares outstanding - diluted	57,317	60,621
(Loss) Earnings per share from Continuing Operations, Per Basic Share	$ 0.11	$ 0.05
(Loss) Earnings per share from Continuing Operations, Per Diluted Share	0.11	0.05
(Loss) Earnings per share from Discontinued Operations, Per Basic Shares	0.02	(0.01)
(Loss) Earnings per share from Discontinued Operations, Per Diluted Share	0.02	(0.01)
Earnings Per Share, Basic	0.13	0.05
(Loss) Earnings Per Share, Diluted	$ 0.13	$ 0.05
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)	818	846

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Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Income Tax Disclosure Additional Details [Table] [Line Items]
Income tax (benefit) expense	$ 2,383	$ 1,781
Effective Income Tax Rate Reconciliation, Percent	27.10%	35.90%
Federal Statutory Income Tax Rate, Percent	21.00%

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Summary of Financial Information by Reportable Segment and Product Line (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021	Aug. 31, 2022
Segment Reporting Information [Line Items]
Net Sales	$ 139,382	$ 130,903
Operating Profit (Loss)	12,309	6,407
Assets	774,401		$ 757,312
Industrial Tools & Services [Member] [Domain]
Segment Reporting Information [Line Items]
Net Sales	127,297	121,313
Operating Profit (Loss)	26,640	18,064
Assets	615,134		618,412
Products [Member]
Segment Reporting Information [Line Items]
Net Sales	98,917	92,350
Service & Rental [Member]
Segment Reporting Information [Line Items]
Net Sales	28,380	28,963
Other Operating Segment [Member]
Segment Reporting Information [Line Items]
Net Sales	12,085	9,590
Operating Profit (Loss)	1,424	(1,257)
Assets	45,338		46,428
General Corporate
Segment Reporting Information [Line Items]
Operating Profit (Loss)	(15,755)	$ (10,400)
Assets	$ 113,929		$ 92,472

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Contingencies and Litigation - Additional Information (Details) - USD ($) $ in Millions	Nov. 30, 2022	Aug. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
Outstanding letters of credit	$ 9.2	$ 10.7
Contractual Obligation, Future Minimum Payments Due, Remainder of Lease Payments	$ 3.2

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Leases Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Components of Lease Expense [Abstract]
Operating Lease, Cost	$ 3,273	$ 3,725
Short-term Lease, Cost	494	450
Variable Lease, Cost	$ 1,115	$ 903

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Leases Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Supplemental Cash Flow Information Related to Leases [Abstract]
Operating Lease, Payments	$ 3,255	$ 3,611
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	$ 483	$ 810

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Leases Leases (Details)	Nov. 30, 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

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Label	Element	Value
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents	us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents	$ 140,352,000
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents	us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents	$ 120,699,000