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What changed in ENERPAC TOOL GROUP CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ENERPAC TOOL GROUP CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+207 added−236 removedSource: 10-K (2025-10-17) vs 10-K (2024-10-21)

Top changes in ENERPAC TOOL GROUP CORP's 2025 10-K

207 paragraphs added · 236 removed · 163 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

44 edited+10 added−18 removed18 unchanged
Biggest changeThis puts our performance in the top quartile in comparison to the BLS NAICS bracket for Machinery Manufacturing (333) for companies with greater than 1,000 employees. Executive Officers of the Registrant The names, ages and positions of all of the executive officers of the Company as o f October 15, 2024 are listed below. Name Age Position Paul E.
Biggest changeThis is an increase year-over-year as fiscal 2024 had a TCIR of 0.50. This puts our performance mid-way between the top 25th percentile and 50th percentile in comparison to the BLS NAICS bracket for Machinery Manufacturing (333) for companies with greater than 1,000 employees.
These tools operate at very high pressures of approximately 5,000 to 12,000 pounds per square inch. With our products used in a wide variety of end markets, they are often deployed in harsh operating conditions, such as machining, infrastructure maintenance and repair, and refining, and petrochemical production, where safety is a key differentiator.
These tools operate at very high pressures of approximately 5,000 to 12,000 pounds per square inch. With our products used in a wide variety of end markets, they are often deployed in harsh operating conditions, such as machining, infrastructure maintenance and repair, refining, and petrochemical production, where safety is a key differentiator.
In the U.S., employees who work more than 30 hours per week are eligible for a comprehensive menu of benefits, including healthcare (health, dental, and vision) coverage, health savings accounts with $500/$1,000 employer funding, dependent care and healthcare flexible spending accounts, company-paid short-term disability, long-term disability, company-paid base life and accidental disability insurance, voluntary life coverage up to 6x annual salary, spousal and dependent life coverage.
In the U.S., employees who work more than 30 hours per week are eligible for a comprehensive menu of benefits, including healthcare (health, dental, and vision) coverage, health savings accounts with $500/$1,000 employer funding, dependent care and healthcare flexible spending accounts, company-paid short-term disability, long-term disability, company-paid base life and accidental disability insurance, voluntary life coverage up to 6x annual salary, and spousal and dependent life coverage.
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, which we seek to supplement through minimizing primary working capital.
Finally, cash flow generation 1 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, which we seek to supplement through minimizing primary working capital.
Although international operations are subject to certain risks, we continue to believe that a global presence is key to maintaining strong relationships with many of our global customers and suppliers.
Although international operations are subject to certain risks, we continue to believe that a global presence is key to 2 maintaining strong relationships with many of our global customers and suppliers.
Our leaders and employees at all levels embrace our health, safety, security, environment, and quality (“HSSEQ”) programs, which translates into an enterprise-wide obligation to provide healthy, safe and productive work environments for our employees and deliver high standards of safety and quality in the products, services and solutions for our customers and end-users.
Our leaders and employees at all levels embrace our health, safety, security, environment, and quality (''HSSEQ'') programs, which translates into an enterprise-wide obligation to provide healthy, safe and productive work environments for our employees and deliver high standards of safety and quality in the products, services and solutions for our customers and end-users.
C ertain information related to the Other operating segment is disclosed within Note 15, "Business Segment, Geographic, and Customer Information" in the notes to the consolidated financial statements in order to comply with requirements under generally accepted accounting principles in the United States ("US GAAP") to reconcile certain required disclosures to the Consolidated Financial Statements.
C ertain information related to the Other operating segment is disclosed within Note 16, "Business Segment, Geographic, and Customer Information" in the notes to the consolidated financial statements in order to comply with requirements under generally accepted accounting principles in the United States ("US GAAP") to reconcile certain required disclosures to the Consolidated Financial Statements.
Product Development and Engineering We conduct research and development a ctivities to develop new products and to enhance the functionality, effectiveness, ease of use and reliability of our existing products. We believe that our engineering and research and development efforts have been, and continue to be, key drivers of our success in the marketplace.
Product Development and Engineering We conduct research and development ("R&D") a ctivities to develop new products and to enhance the functionality, effectiveness, ease of use and reliability of our existing products. We believe that our engineering and research and development efforts have been, and continue to be, key drivers of our success in the marketplace.
Financial information related to the Company's reportable segment is included in Note 15, "Business Segment, Geographic and Customer Information" in the notes to the consolidated financial statements. The Company has an Other operating segment, which does not meet the criteria to be considered a reportable segment.
Financial information related to the Company's reportable segment is included in Note 16, "Business Segment, Geographic and Customer Information" in the notes to the consolidated financial statements. The Company has an Other operating segment, which does not meet the criteria to be considered a reportable segment.
Assuming no significant supply chain constraints arise after the date of this report, substantially all of the backlog at August 31, 2024 is expected to be filled within twelve months. While we typically experience a stronger second half to our fiscal year, our consolidated sales are not subject to significant seasonal fluctuations.
Assuming no significant supply chain constraints arise after the date of this report, substantially all of the backlog at August 31, 2025 is expected to be filled within twelve months. 3 While we typically experience a stronger second half to our fiscal year, our consolidated sales are not subject to significant seasonal fluctuations.
Enerpac Tool Group's businesses are global leaders in providing 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.
Enerpac Tool Group's businesses are global leaders in providing 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 Milwaukee, Wisconsin.
Bi-annually, our Executive Leadership Team ("ELT") reviews the skills we require to execute our corporate strategy and key role requirements to identify development opportunities for our emerging talent. Annually, we conduct performance review and succession planning, and we promote a long-term career development view by encouraging the creation of unique individual development plans.
Semi-annually, our Executive Leadership Team reviews the skills we require to execute our corporate strategy and key role requirements to identify development opportunities for our emerging talent. Annually, we conduct performance review and succession planning, and we promote a long-term career development view by encouraging the creation of unique individual development plans.
On July 11, 2023, the Company completed the sale of the Cortland Industrial business ( see Note 5, "Discontinued Operations and Other Divestiture Activities" in the notes to the consolidated financial statements).
On July 11, 2023, the Company completed the sale of the Cortland Industrial business ( see Note 6, "Discontinued Operations and Other Divestiture Activities" in the notes to the consolidated financial statements).
Financial information related to the Company's geographic footprint of our continuing operations is included in Note 15, "Business Segment, Geographic and Customer Information" in the notes to the consolidated financial statements.
Financial information related to the Company's geographic footprint of our continuing operations is included in Note 16, "Business Segment, Geographic and Customer Information" in the notes to the consolidated financial statements.
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 refinery/petrochemical; general industrial; industrial maintenance, repair and operations ("MRO"); machining & manufacturing; power generation; infrastructure; mining; and other markets.
The Company has one reportable segment, the Industrial Tools & Services ("IT&S") Segment. 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 refinery/petrochemical; general industrial; industrial maintenance, repair and operations ("MRO"); machining & manufacturing; power generation; infrastructure; mining; and other markets.
We also provide rental services for certain of our products. Our branded tools and services are primarily marketed through the ENERPAC®, HYDRATIGHT®, LARZEP & DESIGN® and SIMPLEX® brand names. 2 The segment delivers products and services primarily through our world-class, global network of distributors, as well as direct sales to OEMs and select end users.
We also provide rental services for certain of our products. Our branded tools and services are primarily marketed through the ENERPAC®, HYDRATIGHT®, LARZEP®, SIMPLEX® and DTA the Smart Move ® brand names. The segment delivers products and services primarily through our world-class, global network of distributors, as well as direct sales to OEMs and select end users.
Employees are offered thirteen paid holidays, and three weeks of paid time off, military leave, a 401(k) retirement plan with a Company match and immediate vesting, access to our employee assistance program, an annual bonus program with broad participation, 4 equity incentive programs, an employee stock purchase plan (ESPP) that allows employees to buy company shares at a 15% discount (up from 10% in the last fiscal year), and flexible work arrangements.
Employees are offered thirteen paid holidays, three weeks of paid time off, military leave, a 401(k) retirement plan with a Company match and immediate vesting, access to our employee assistance program, an annual bonus program with broad participation, equity incentive programs, and an employee stock purchase plan that allows employees to buy company shares at a 15% discount (up from 10% in fiscal 2024).
Benjamin Topercer, EVP and Chief Human Resource Officer, joined the Company in February 2022 and leads the global human resources function, including our global HSSEQ organization, as well as our DEIB initiatives and communications function. From June 2016 until he joined Enerpac, Mr.
Benjamin Topercer, Executive Vice Principal and Chief Human Resource Officer, joined the Company in February 2022 and leads the global human resources function, including our global HSSEQ organization, as well as our communications function. From June 2016 until he joined Enerpac, Mr.
Chack, Executive Vice President - Operations, joined the Company in July 2024 and leads all aspects of Enerpac’s global operations, including oversight for manufacturing, procurement, logistics, continuous improvement, quality, and reliability. Prior to joining Enerpac, Mr. Chack was SVP Supply Chain for Mohawk Industries. Before his time at Mohawk, Mr.
Eric T. Chack, Executive Vice President - Operations, joined the Company in July 2024 and leads all aspects of Enerpac’s global operations, including oversight for manufacturing, procurement, logistics, continuous improvement, quality, and reliability. Prior to joining Enerpac, from November 2021 to July 2024, Mr. Chack was SVP Supply Chain for Mohawk Industries.
We anticipate that we will continue to make significant expenditures for research and development as we seek to provide new innovative tools and services to grow our market share. Research and development ("R&D") costs are expensed as incurred. R&D costs were $12 million in fiscal 2024, $9 million in fiscal 2023 and $7 million in fiscal 2022.
We anticipate that we will continue to make significant expenditures for research and development as we seek to provide new innovative tools and services to grow our market share. R&D costs are expensed as incurred and were $14 million in fiscal 2025, $12 million in fiscal 2024 and $9 million in fiscal 2023. The Company holds numerous patents and trademarks.
The talent that makes up our workforce (approximately 2,000 employees as of August 31, 2024) is critical to the success of our company and the ability to deliver shareholder value. Our talent development framework is built around a robust performance management and development structure.
The talent that makes up our workforce (approximate ly 2,100 em ployees as of August 31, 2025) is critical to the success of our company and the ability to deliver shareholder value. Our talent development framework is built around a robust performance management and development structure.
Chack was SVP Global Operations & Supply Chain for Briggs & Stratton and held global operations leadership roles at SPX Corporation and IDEX Corporation. He has extensive experience building, developing, and optimizing the performance of world-class operations teams.
Before his time at Mohawk, from January 2018 to July 2021, Mr. Chack was SVP Global Operations & Supply Chain for Briggs & Stratton and held global operations leadership roles at SPX Corporation and IDEX Corporation. He has extensive experience building, developing, and optimizing the performance of world-class operations teams.
Both part time and full-time employees are eligible for adoption assistance and up to 12 weeks of parental leave, of which six weeks are paid for full time employees at an employee's full salary.
Both part time and full-time employees are eligible for adoption assistance and up to 12 weeks of parental leave, of which six weeks are paid for full time employees at an employee's full salary. We offer tuition reimbursement up to $7,000 for associate and undergraduate programs and $9,000 for graduate programs.
We continually track and report our performance, including thorough reviews of incidents, near-misses, and quality issues; and management accountability and discussion of these improvement opportunities is a cornerstone of all business reviews. We finished the year with a total case incident rate (TCIR) of 0.50. This is a decrease year-over-year as fiscal 2023 had a TCIR of 0.64.
We continually track and report our performance, including thorough reviews of incidents, near-misses, and quality issues; and management accountability and discussion of these improvement opportunities is a cornerstone of all 4 business reviews. We finished the year wit h a total case incident rate (TCIR) of 0.54, inclusive of DTA.
The Company holds numerous patents and trademarks. While no individual patent is believed to be of such importance that its termination would have a material adverse effect on our business, the termination of certain of our trademarks, including ENERPAC®, SIMPLEX®, HYDRATIGHT® and LARZEP & DESIGN®, could have a material adverse effect on our business.
While no individual patent is believed to be of such importance that its termination would have a material adverse effect on our business, the termination of certain of our trademarks, including ENERPAC®, HYDRATIGHT®, LARZEP®, SIMPLEX® and DTA the Smart Move ®, could have a material adverse effect on our business. Competition The markets for our products are highly competitive.
ASCEND’s key initiatives include accelerating organic growth 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.
In March 2022, the Company announced the start of its ASCEND transformation program (''ASCEND''). ASCEND’s key initiatives included accelerating organic growth strategies, improving operational excellence and production efficiency by utilizing a Lean approach, and driving greater efficiency and productivity in selling, general and administrative (''SG&A'') expense by better leveraging resources to create a more efficient and agile organization.
Examples of industrial distributors include W.W. Grainger, MSC and Blackwoods. Other Operating Segment Cortland Biomedical is a full-service biomedical textile product development company and represents the Other operating segment.
Other Operating Segment Cortland Biomedical is a full-service biomedical textile product development company and represents the Other operating segment.
Order Backlogs and Seasonality Our operating segments have a relat iv ely short order-to-ship cycle. We had order backlogs of $41 million and $54 million at August 31, 2024 and 2023, respectively. The decrease in our order backlog during the fiscal year was primarily due to continued effort to decrease inventory levels globally.
We h ad order backlogs of $54 million and $41 million at August 31, 2025 and 2024, respectively. The increase in our order backlog during the fiscal year was primarily due to continued effort to decrease inventory levels globally.
As such, retained liabilities associated with the former EC&S segment are considered discontinued operations in all periods presented herein. 1 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.
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 are committed to devoting the time, resources and planning necessary to maximize the potential of our employees' career development, as well as address the future skill needs of our organization. We offer competitive compensation and benefits tailored to the geographical markets and industries in which we operate.
We are committed to devoting the time, resources and planning necessary to maximize the potential of our employees' career development, as well as addressing the future skills needs of our organization.
Raw materials that go into the components we source, such as steel, aluminum, plastic resin, brass, steel wire and rubber, are subject to price fluctuations and tariffs, which could have an impact on our results. We have been able to offset the impact of inflation with pricing actions, manufacturing efficiencies and other cost reductions.
Raw Material Costs, Inflation and Tariffs We source materials and components from a network of global suppliers. These items are typically available from multiple suppliers. Raw materials that go into the components we source, such as steel, aluminum, plastic resin, brass, steel wire and rubber, are subject to price fluctuations and tariffs, which could have an impact on our results.
Percentages of Sales by Fiscal Quarter 2024 2023 Quarter 1 (September - November) 24% 23% Quarter 2 (December - February) 23% 24% Quarter 3 (March - May) 26% 26% Quarter 4 (June - August) 27% 27% 100% 100% Human Capital Management The goal of our human capital management strategy and practices is for Enerpac to be considered an employer of choice, and our initiatives and programs are predicated on making this objective a reality.
Human Capital Management The goal of our human capital management strategy and practices is for Enerpac to be considered an employer of choice, and our initiatives and programs are predicated on making this objective a reality.
We monitor progress throughout the year, with candid and frequent dialogue encouraged along the way, and, new for fiscal 2024, a formal check-in process at the mid-year point to facilitate a clear understanding of goals and the status of progress toward achieving those goals.
Together with their leaders, employees establish annual goals and objectives that align directly with our organizational commitments. We monitor progress throughout the year, with candid and frequent dialogue encouraged along the way, and a formal check-in process at the mid-year point to facilitate a clear understanding of progress against goals as well as career development for our employees.
Sternlieb was Group President, Global Cooking in the Food Equipment Group at Illinois Tool Works since 2014. He served as a Vice President & General Manager with Danaher from 2011 to 2014. Before Danaher, he held management roles with the H.J. Heinz Company, a leading food production company, and was a consultant with McKinsey & Company. P.
Sternlieb served as Executive Vice President ("EVP") and President, Protein, at John Bean Technologies Corporation ("JBT") since October 2017. Prior to JBT, Mr. Sternlieb was Group President, Global Cooking in the Food Equipment Group at Illinois Tool Works since 2014. He served as a Vice President & General Manager with Danaher from 2011 to 2014.
Competition The markets for our products are highly competitive. We provide a diverse and broad range of industrial products and services to numerous global end markets, many of which are highly fragmented.
We provide a diverse and broad range of industrial products and services to numerous global end markets, many of which are highly fragmented. Although we face larger competitors in several served markets, some of our competition is comprised of smaller companies which may lack the footprint or financial resources to serve global customers.
We have implemented single piece flow processes in most of our plants which reduces inventory levels, lowers re-work costs and shortens lead times to customers. Components are built to our highly engineered specifications by a variety of suppliers in best-cost locations including various countries in Asia.
Manufacturing and Operations While we do have manufacturing capabilities including machining and fabrication, our manufacturing consists primarily of light assembly of components we source from a net work of global suppliers. We have implemented single piece flow processes in most of our plants which reduces inventory levels, lowers re-work costs and shortens lead times to customers.
Acquisitions and Divestitures For a summary of recent divestiture transactions impacting continuing operations, see Note 5, "Discontinued Operations and Other Divestiture Activities" in the notes to the consolidated financial statements. International Business Our products and services are generally available globally, with our principal markets outside the United States being Europe, the Middle East and Asia.
Acquisitions and Divestitures For a summary of recent acquisition and divestiture transactions impacting continuing operations, see N ote 5 , " Acquisitions " and Note 6, "Discontinued Operations and Other Divestiture Activities" , respectively, in the notes to the consolidated financial statements.
We have built strong relationships with our key suppliers and, while we single source certain of our components, in many cases there are several qualified alternative sources. Raw Material Costs, Inflation and Tariffs We source materials and components from a network of global suppliers. These items are typically available from multiple suppliers.
Components are built to our highly engineered specifications by a variety of suppliers in best-cost locations including various countries in Asia. We have built strong relationships with our key suppliers and, while we single source certain of our components, in many cases there are several qualified alternative sources.
Topercer 47 Executive Vice President and Chief Human Resource Officer Paul Sternlieb, President and Chief Executive Officer, was appointed President and Chief Executive Officer of the Company in October 2021. Prior to joining the Company, Mr. Sternlieb served as Executive Vice President ("EVP") and President, Protein, at John Bean Technologies Corporation ("JBT") since October 2017. Prior to JBT, Mr.
Chack 47 Executive Vice President - Operations Noah N. Popp 52 Executive Vice President, General Counsel, Corporate Secretary & Chief Compliance Counsel Benjamin J. Topercer 48 Executive Vice President and Chief Human Resource Officer Paul Sternlieb, President and Chief Executive Officer, was appointed President and Chief Executive Officer of the Company in October 2021. Prior to joining the Company, Mr.
In fiscal 2024, we derived 38% of our net sales from the United States, 29% from Europe, 15% from the Middle East, 10% from Asia and 8% from other geographic areas.
International Business Our products and services are generally available globally, with our principal markets outside the United States being Europe, the Middle East and Asia. In fiscal 2025, we derived 37% of our net sales from the United States, 28% from Europe, 13% from the Middle East, 11% from Asia and 11% from other geographic areas.
We continue to evaluate enhancements to our compensation and benefit programs in all locations to ensure we remain competitive and meet the needs of our employees. Diversity, Inclusion & Belonging. Diversity, Inclusion & Belonging ("DI&B") remains a focus area as we strive to foster an inclusive culture of belonging.
We also offer a dependent scholarship of up to $2,500 for both part-time and full-time employees. We continue to evaluate enhancements to our compensation and benefit programs in all locations to ensure we remain competitive and meet the needs of our employees. Employee Safety .
In addition, several of our products have been subject to tariffs, but to date we have been able to offset the majority of additional costs from tariffs through price increases. We continue to manage our supply chain to mitigate ongoing risks associated with the evolving geopolitical and inflationary environments.
We have been able to offset the impact of inflation and tariffs with productivity and pricing actions. We continue to manage our supply chain to mitigate ongoing risks associated with the evolving geopolitical and inflationary environments. Order Backlogs and Seasonality Our operating segments have a relat iv ely short order-to-ship cycle.
In addition, he served as an Infantry Officer in the Marine Corps. 5 James Denis, EVP, General Counsel, Company Secretary & Chief Compliance Counsel, has served in this capacity since September 2022.
In addition, he served as an Infantry Officer in the Marine Corps. Noah N. Popp, Executive Vice President, General Counsel, Corporate Secretary & Chief Compliance Counsel, joined the Company in July 2025. Before joining the Company, Mr.
Although we face larger competitors in several served markets, some of our competition is comprised of smaller companies which may lack the footprint or financial resources to serve global customers. We compete for business principally on the basis of customer service, product quality and availability, and engineering and research and development expertise.
We compete for business principally on the basis of customer service, product quality and availability, and engineering and research and development expertise. In addition, we believe that our cost structure, strategic global sourcing capabilities and global distribution support our competitive position.
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During fiscal 2025, the Company is scheduled to relocate our headquarters to Milwaukee, Wisconsin. The Company has one reportable segment, the Industrial Tools & Services ("IT&S") Segment.
Added
The ASCEND program was completed as of August 31, 2024, with total program costs of $75 million, of which $19 million related to restructuring charges.
Removed
During the fourth quarter of fiscal 2019, we entered into a Securities Purchase Agreement ("SPA") to sell the remaining businesses within our legacy Engineered Components & Systems ("EC&S") segment. We closed the transaction during our first quarter of fiscal 2020. The divestiture of the EC&S segment was a strategic shift to become a pure-play industrial tools and services company.
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Percentages of Sales by Fiscal Quarter* 2025 2024 Quarter 1 (September - November) 24% 24% Quarter 2 (December - February) 24% 23% Quarter 3 (March - May) 26% 26% Quarter 4 (June - August) 27% 27% 100% 100% *Amounts may not add to 100% due to rounding.
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In March 2022, the Company announced the start of its ASCEND transformation program (“ASCEND”), initially estimating an incremental $40 to $50 million of annual operating profit once fully implemented.
Added
In 2025, we rolled out Building a Culture of Success: Competencies and Behaviors for Enerpac Employees and Leaders, a very detailed competency model with behavioral guidance that we believe will foster the kind of culture that allows all of our employees to thrive.
Removed
At the time, the Company anticipated investing $60 to $65 million through the end of fiscal 2024 to complete these actions. In June 2022, the Company approved a restructuring plan in connection with the initiatives identified as part of the ASCEND transformation program to drive greater efficiency and productivity in global selling, general and administrative resources.
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Launched in July 2025, all our employees will have completed a comprehensive workshop by end of November 2025 to explain what the model is, how to use it, and how it will be used within the organization.
Removed
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 (see Note 4, “Restructuring Charges” in the notes to the consolidated financial statements). These costs were incorporated into the initial investment of $60 to $65 million.
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In 2026, we will incorporate these competencies in how we how we reward and recognize performance, how we train and promote, and how we evaluate our performance. We offer competitive compensation and benefits tailored to the geographical markets and industries in which we operate.
Removed
In September 2022, the Company approved an update to the restructuring plan to a range of $10 to $15 million; these costs were still incorporated into the initial investment value, and the range did not change at that time.
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Executive Officers of the Registrant The names, ages and positions of all of the executive officers of the Company as o f October 17, 2025 are listed below. Name Age Position Paul E. Sternlieb 53 President and Chief Executive Officer Darren M. Kozik 48 Executive Vice Present and Chief Financial Officer Eric T.
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In March 2023, the Company increased the anticipated investment range to $70 to $75 million, inclusive of the $10 to $15 million of the previously announced restructuring, over the life of the program.
Added
Before Danaher, he held management roles with the H.J. Heinz Company, a leading food production company, and was a consultant with McKinsey & Company. Darren M. Kozik was appointed as the Company’s Executive Vice President and Chief Financial Officer effective October 28, 2024. Prior to joining the Company, Mr.
Removed
In October 2023, the Company announced that during fiscal 2023, the Company had realized approximately $54 million of annual operating profit from execution of the ASCEND program and would no longer be breaking out the ASCEND benefit from results going into fiscal 2024.
Added
Kozik served as Senior Vice President—Global Corporate Finance of ManpowerGroup, a leading global workforce solutions company, after having served as Senior Vice President—North America Finance and Shared Services of ManpowerGroup from August 2018. Prior to ManpowerGroup, from May of 2016 to August of 2018, Mr.
Removed
Through fiscal 2023, the Company invested approximately $60 million as part of the program, both through program charges and restructuring. Through fiscal 2024, the Company has invested approximately $75 million as part of the program, consisting of $19 million through restructuring and $56 million in ASCEND transformation program charges.
Added
Kozik served first as the Chief Financial Officer of Mortara Instrument, and subsequently as Vice President and General Manager for the business. Mr. Kozik started his career at General Electric in 1999 and worked in roles of increasing scope and global responsibility, ending as the Chief Financial Officer of the Global Ultrasound business unit of GE Healthcare in 2016.
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In addition, we believe that our cost structure, strategic global sourcing capabilities and global distribution support our competitive position. 3 Manufacturing and Operations While we do have manufacturing capabilities including machining and fabrication, our manufacturing consists primarily of light assembly of components we source from a net work of global suppliers.
Added
Popp served as Regional General Counsel-Americas and Corporate Secretary of JBT Marel Corporation since September 2014, having served over the prior ten years in various in-house legal counsel positions with Kraft Foods Group, Inc., TMK IPSCO, Reyes Holdings L.L.C. and IPSCO Inc.
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Together with their leaders, employees establish annual goals and objectives that align directly with our organizational commitments.
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We offer tuition reimbursement up to $5,250 for associate and undergraduate programs and $7,500 for graduate programs, while also offering the same level of reimbursement to part time workers as full-time workers. We also offer a dependent scholarship of up to $2,500 for both part-time and full-time employees.
Removed
In addition, our Board reflects a diverse set of Directors, including three female (30%) and one racially diverse (10%) individual. We believe a continued focus on DI&B aligns with our values and provides a competitive advantage, enabling us to attract exceptional talent, leverage diverse perspectives, and ultimately drive value creation for our shareholders. Employee Safety .
Removed
Sternlieb 52 President and Chief Executive Officer P. Shannon Burns 54 Interim Principal Financial Officer and Head of Financial Planning, Operations and Decision Support Eric T. Chack 46 Executive Vice President - Operations James P. Denis 50 Executive Vice President, General Counsel, Company Secretary & Chief Compliance Counsel Benjamin J.
Removed
Shannon Burns, Interim Principal Financial Officer and Head of Financial Planning, Operations and Decision Support, was appointed as the Company’s Interim Principal Financial Officer by the Board of Directors effective March 1, 2024. Prior to his appointment, Mr. Burns served as Head of Financial Planning, Operations, and Decision Support since joining the Company in November 2022.
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Prior to joining the Company, Mr. Burns was with Harley-Davidson Motor Company, holding various positions in Finance and Investor Relations from August 2011 through November 2022. From June 2007 to August 2011, Mr. Burns was with MillerCoors Brewing Company, serving as a Manager, following ten years with Ernst & Young and seven years with American Express Financial Advisors. Eric T.
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He joined the Company in 2013 as our Global Litigation Counsel and was promoted to Regional General Counsel for the Americas and APAC in October 2018 and Assistant General Counsel in March 2020. In December 2021, he was appointed Acting General Counsel and Corporate Secretary. Before joining the Company, Mr.
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Denis was a shareholder with the law firm of Reinhart Boerner Van Deuren s.c., where he was a member of the firm’s Products Liability and Insurance Risk Management Teams.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

41 edited+5 added−5 removed103 unchanged
Biggest changeRisks Related to the Execution of Our Strategy If we fail to develop new products, or customers do not accept our new products, our business could be adversely affected. Our ability to develop innovative new products can affect our competitive position and often requires the investment of significant resources.
Biggest changeGovernment that disadvantage the wind industry may adversely affect demand for certain of our products and adversely affect our results of operations. 9 Risks Related to the Execution of Our Strategy If we fail to develop new products, or customers do not accept our new products, our business could be adversely affected.
Our vendors may be unable or unwilling to meet our demand for raw materials or components, or significantly increase lead times for deliveries, which may be unable to offset through alternate sources of supply, Further, vendors may impose significant increases in the price of critical components and raw materials that we may be unable to pass along to our customers.
Our vendors may be unable or unwilling to meet our demand for raw materials or components, or significantly increase lead times for deliveries, which we may be unable to offset through alternate sources of supply, Further, vendors may impose significant increases in the price of critical components and raw materials that we may be unable to pass along to our customers.
Our sales and operating activities outside of the U.S. are, and will continue to be, subject to a number of risks, including: • unfavorable fluctuations in foreign currency exchange rates; • adverse changes in foreign tax, legal and regulatory requirements; • export and import restrictions and controls on repatriation of cash; • political and economic instability; • difficulty in protecting intellectual property; • government embargoes, tariffs and trade protection measures, such as “anti-dumping” duties applicable to classes of products, and import or export licensing requirements, as well as the imposition of trade sanctions against a class of products imported from or sold and exported to, or the loss of “normal trade relations” status with, countries in which we conduct business, that could significantly increase our cost of products or otherwise reduce our sales and harm our business; • cultural norms and expectations that may sometimes be inconsistent with our Code of Conduct and our requirements about the manner in which our employees, agents and distributors conduct business; • differing labor regulations; and • acts of hostility, terror or war.
Our sales and operating activities outside of the U.S. are, and will continue to be, subject to a number of risks, including: • unfavorable fluctuations in foreign currency exchange rates; • adverse changes in foreign tax, legal and regulatory requirements; • export and import restrictions and controls on repatriation of cash; • political and economic instability; 8 • difficulty in protecting intellectual property; • government embargoes, tariffs and trade protection measures, such as “anti-dumping” duties applicable to classes of products, and import or export licensing requirements, as well as the imposition of trade sanctions against a class of products imported from or sold and exported to, or the loss of “normal trade relations” status with, countries in which we conduct business, that could significantly increase our cost of products or otherwise reduce our sales and harm our business; • cultural norms and expectations that may sometimes be inconsistent with our Code of Conduct and our requirements about the manner in which our employees, agents and distributors conduct business; • differing labor regulations; and • acts of hostility, terror or war.
In particular, our articles of incorporation and bylaws, among other things: • require a supermajority shareholder vote to approve a merger of the Company with another entity; • regulate how shareholders may present proposals or nominate directors for election at shareholders’ meetings; and 13 • authorize our board of directors to issue preferred stock in one or more series, without shareholder approval.
In particular, our articles of incorporation and bylaws, among other things: • require a supermajority shareholder vote to approve a merger of the Company with another entity; • regulate how shareholders may present proposals or nominate directors for election at shareholders’ meetings; and • authorize our board of directors to issue preferred stock in one or more series, without shareholder approval.
Terrorist attacks against targets in the U.S. or abroad, rumors or threats of war, other geopolitical activity or trade disruptions, such as those caused by the Russia-Ukraine conflict, the armed conflicts in the Middle East, or any conflict or threatened conflict between China and Taiwan, may cause general economic conditions in the U.S. or abroad to deteriorate.
Terrorist attacks against targets in the U.S. or abroad, rumors or threats of war, other geopolitical activity or trade disruptions, such as those caused by the Russia-Ukraine conflict, the armed conflicts in the Middle East, or any conflict or threatened conflict between China and Taiwan, may cause trade relations and general economic conditions in the U.S. or abroad to deteriorate.
Item 1A. Risk Factors The risks and uncertainties described below are those that we have identified as material but are not the only risks and uncertainties facing the Company. If any of the events contemplated by the following risks occurs, our business, financial condition, or results of operations could be materially adversely affected.
Item 1A. Risk Factors The risks and uncertainties described below are those that we have identified as material but are not the only risks and uncertainties facing the Company. If any of the events contemplated by the following risks occurs, our business, financial 5 condition, or results of operations could be materially adversely affected.
If the demand for our products is less than our expectations or if we otherwise fail to anticipate customer demand properly, an 6 oversupply of components could result in inventory levels that could also lead to significant excess and obsolete inventory charges and adversely affect our operating and financial results.
If the demand for our products is less than our expectations or if we otherwise fail to anticipate customer demand properly, an oversupply of components could result in inventory levels that could also lead to significant excess and obsolete inventory charges and adversely affect our operating and financial results.
The marketing success of many of our businesses in the U.S. and abroad depends largely upon our independent agents’ and distributors’ sales and service expertise and relationships with customers in our end markets. Many of these agents have 7 developed strong ties to existing and potential customers because of their detailed knowledge of our products.
The marketing success of many of our businesses in the U.S. and abroad depends largely upon our independent agents’ and distributors’ sales and service expertise and relationships with customers in our end markets. Many of these agents have developed strong ties to existing and potential customers because of their detailed knowledge of our products.
In addition, some of our competitors may be willing to reduce prices and accept lower margins to compete with us. 8 Our international operations pose political, currency and other risks. We expect sales from and into foreign markets to continue to represent a significant portion of our revenue.
In addition, some of our competitors may be willing to reduce prices and accept lower margins to compete with us. Our international operations pose political, currency and other risks. We expect sales from and into foreign markets to continue to represent a significant portion of our revenue.
This has resulted in, and in the future could result in, lower capital expenditures and project modifications, delays or cancellations by those customers, reducing the demand for certain of our products serving that end market, which could adversely affect our results of operations and financial condition.
This has resulted in, and in the future could result in, lower capital expenditures and 6 project modifications, delays or cancellations by those customers, reducing the demand for certain of our products serving that end market, which could adversely affect our results of operations and financial condition.
Various provisions and laws could delay or prevent a change of control. The anti-takeover provisions of our articles of incorporation and bylaws and provisions of Wisconsin corporation law could delay or prevent a change of control or may impede the ability of the holders of our common stock to change our management.
Various provisions and laws could delay or prevent a change of control. 13 The anti-takeover provisions of our articles of incorporation and bylaws and provisions of Wisconsin corporation law could delay or prevent a change of control or may impede the ability of the holders of our common stock to change our management.
These supply chain issues could materially adversely affect our business, operating results, and financial condition and could materially damage customer relationships. We procure certain components for our products from single or limited suppliers.
These supply chain issues, and others, could materially adversely affect our business, operating results, and financial condition and could materially damage customer relationships. We procure certain components for our products from single or limited suppliers.
The process of integrating acquired businesses into our existing operations also may require additional financial resources and attention from management that would otherwise be available for the ongoing development or expansion of our existing operations. Although we expect to successfully integrate any acquired businesses, we may not achieve the desired net benefit in the timeframe planned.
The process of integrating acquired businesses into our existing operations also may require additional financial resources and attention from management that would otherwise be available for the ongoing development or expansion of our existing operations. Although we expect to successfully integrate any acquired businesses, we may not achieve the desired net benefit in the timeframe planned or at all.
A significant portion of our revenues are derived from the sale of products and services to end users in the oil & gas industry.
A portion of our revenues are derived from the sale of products and services to end users in the oil & gas industry.
In addition, many of our manufacturing operations and suppliers are located outside the United States, including China, the United Kingdom and the Netherlands.
In addition, many of our manufacturing operations and suppliers are located outside the United States, including China, the United Kingdom, Spain and the Netherlands.
See Note 16, "Commitments and Contingencies" in the notes to the consolidated financial statements for additional information about compliance risks. 11 Health, safety and environmental laws and regulations may result in additional costs. We are subject to federal, state, local and foreign laws and regulations governing public and worker health and safety.
See Note 17, "Commitments and Contingencies" in the notes to the consolidated financial statements for additional information about compliance risks. 11 Health, safety and environmental laws and regulations may result in additional costs. We are subject to federal, state, local and foreign laws and regulations governing public and worker health and safety.
An attack also could result in losses due to an inability to recover lost data, software and key documentation, ransomware payments, security breaches, theft, lost or corrupted data, misappropriation of sensitive, confidential or personal data or information, loss of trade secrets and commercially valuable information, reputational harm, including loss of confidence by our customers, suppliers and employees in our ability to adequately protect their information, fines, production downtimes and operational disruptions.
An attack or information system failure also could result in losses due to an inability to recover lost data; software and key documentation; ransomware payments; security breaches; theft; lost or corrupted data; misappropriation of sensitive, confidential or personal data or information; loss of trade secrets and commercially valuable information; reputational harm, including loss of confidence by our customers, suppliers and employees in our ability to adequately protect their information; fines; and production downtimes 7 and operational disruptions.
See Note 6, "Goodwill, Intangible Assets and Long-Lived Assets" in the notes to the consolidated financial statements and "Critical Accounting Estimates" for further discussion on goodwill, intangible asset and long-lived asset impairments. Any future goodwill or intangible asset impairments could negatively affect our financial condition and results of operations.
See Note 7, "Goodwill, Intangible Assets and Long-Lived Assets" in the notes to the consolidated financial statements and "Critical Accounting Estimates" for further discussion on goodwill, intangible asset and long-lived asset impairments. Any future goodwill or intangible asset impairments could negatively affect our financial condition and results of operations.
If acquired businesses do not operate as we anticipate, it could materially impact our business, financial condition and results of operations. The indemnification provisions of acquisition agreements may result in unexpected liabilities. Certain acquisition agreements from past acquisitions require the former owners to indemnify us against certain liabilities related to the operation of each of their companies.
If acquired businesses do not operate as we anticipate, it could materially impact our business, financial condition and results of operations. The indemnification provisions of acquisition agreements may result in unexpected liabilities. Certain acquisition agreements from past acquisitions require the former owners to indemnify us against certain liabilities related to the operation of such acquired companies.
Globally, the shipping industry faces other challenges, including labor disputes at major ports and railways and weather-related disruptions, such as droughts in Panama reducing capacity in the Panama Canal. These issues could delay importation of products or require the Company to locate alternative ports or warehousing providers to avoid disruption to customers.
Globally, the shipping industry faces other challenges, including labor disputes at major ports and railways and weather-related disruptions, such as droughts in Panama reducing capacity in the Panama Canal. These issues could delay the delivery of our products or require the Company to locate alternative ports or warehousing providers to avoid disruption to customers.
Equipment failures, natural disasters, health issues (including pandemics like COVID-19), power outages, fires, explosions, terrorism, adverse weather conditions, labor disputes or other events could create a material disruption. Interruptions to production could increase our cost of sales, harm our reputation and adversely affect our ability to attract or retain our customers.
Equipment failures, natural disasters, health issues (including pandemics), power outages, fires, explosions, terrorism, adverse weather conditions, labor disputes or other events could create a material disruption. Interruptions to production could increase our cost of sales, harm our reputation and adversely affect our ability to attract or retain our customers.
For example, the armed conflicts in the Middle East and the associated attacks on commercial ships in the Red Sea has caused global increases in shipping costs, as well as significant delays for some shipments.
For example, the armed conflicts in the Middle East and the associated attacks on commercial ships in the Red Sea have caused global increases in shipping costs, as well as significant delays for some shipments.
In addition, a reduction in the production of petroleum products as a result of consumer behavior that embraces alternative sources of energy over oil & gas could similarly adversely affect our results of operations by reducing the demand for our products and services.
In addition, a reduction in the production of petroleum products as a result of consumer behavior that embraces alternative sources of energy over oil & gas could similarly adversely affect our results of operations by reducing the demand for our products and services. Similarly, actions by the U.S.
In addition, we implemented other plans that incurred restructuring costs to (i) eliminate redundancies in our corporate or regional structures, (ii) eliminate excess capacity in our facilities as a result of integration of acquisitions or divestitures of product lines, or (iii) eliminate product or service lines that did not meet targeted profitability metrics.
In addition, we implemented other plans that incurred restructuring costs to eliminate redundancies in our corporate or regional structures, eliminate excess capacity in our facilities as a result of integration of acquisitions or divestitures of product lines, and eliminate product or service lines that did not meet targeted profitability metrics.
Although we expect that the improved operating profit, cost savings and realization of efficiencies will continue to provide annual benefit, we may not fully maintain these improvements (see Note 3.
Although we expect that the improved operating profit, cost savings and realization of efficiencies from these programs will continue to provide annual benefits, we may not fully maintain these improvements (see Note 3.
The ASCEND program focused on the following key initiatives: (i) accelerating organic growth strategies, (ii) improving operational excellence and production efficiency by utilizing a lean approach and (iii) driving greater efficiency and productivity in selling, general and administrative expenses.
The ASCEND program focused on accelerating organic growth strategies, improving operational excellence and production efficiency by utilizing a lean approach and driving greater efficiency and productivity in selling, general and administrative expenses.
Further, we procure a significant portion of our components from suppliers located in China, and we are therefore exposed to potential disruptions in deliveries from these suppliers due to political tensions with China, geopolitical risks, government-mandated facility closures in China, energy shortages or other causes.
Further, we procure a portion of our components from suppliers located in China, and we are therefore exposed to potential disruptions in deliveries from these suppliers due to political tensions with China, including tariffs and other trade restrictions; geopolitical risks; energy shortages or other causes.
Also, our contracting standards may be more stringent than those of certain competitors, and as a result, we may experience market share losses or the reduction in growth opportunities. 9 Imposition of climate-related laws and regulations that disadvantage the oil & gas industry compared to other industries or consumer behavior that reduces demand for petroleum products may have an adverse impact on our results of operations.
Also, our contracting standards may be more stringent than those of certain competitors, and as a result, we may experience market share losses or the reduction in growth opportunities. Imposition of laws and regulations that disadvantage the oil & gas industry or other energy industries may have an adverse impact on our results of operations.
Our goodwill and other intangible assets represent a substantial amount of our total assets. Our total assets reflect substantial intangible assets, primarily goodwill. As of August 31, 2024, goodwill and other intangible assets totaled $306 million, or 39% of our total assets.
Our goodwill and other intangible assets represent a substantial amount of our total assets. Our total assets reflect substantial intangible assets, primarily goodwill. As of August 31, 2025, goodwill and other intangible assets totaled $337 million, or 41% of our total assets.
Cybersecurity vulnerabilities, threats and more sophisticated and targeted computer crime could pose a risk to our systems, networks, operations, products, solutions, services and data.
Cybersecurity vulnerabilities, threats and more sophisticated and targeted computer crime could pose a risk to our systems, networks, operations, products, solutions, services and data. Increased global cybersecurity threats, computer viruses and more sophisticated and targeted cyber-related attacks pose risks to our systems, networks and operations.
Difficulties or delays in research, development, production or commercialization of new products, or failure to gain market acceptance of new products and technologies, may reduce future sales and adversely affect our competitive position.
Our ability to develop innovative new products can affect our competitive position and often requires the investment of significant resources. Difficulties or delays in research, development, production or commercialization of new products, or failure to gain market acceptance of new products and technologies, may reduce future sales and adversely affect our competitive position.
Uncertainties about future tariff changes could result in mitigation actions that prove to be ineffective or detrimental to our business. Risks Related to Our Business and Operations Logistics challenges, including global freight capacity shortages, could increase our freight costs or cause delays in our ability to fulfill orders and could have an adverse impact on our business and operating results.
Risks Related to Our Business and Operations Logistics challenges, including global freight capacity shortages, could increase our freight costs or cause delays in our ability to fulfill orders and could have an adverse impact on our business and operating results.
Increased global cybersecurity threats, computer viruses and more sophisticated and targeted cyber-related attacks, as well as cybersecurity failures re sulting from human error, vulnerabilities and technological errors, including the errors of third-party software providers, pose a risk to our systems, including third-party vendor operated systems, operations and products and potentially those of our business partners.
Similarly, cybersecurity failures re sulting from human error, vulnerabilities and technological errors, including the errors of third-party software providers, can also pose a risk to our systems, including third-party vendor operated systems, operations and products and potentially those of our business partners.
We directly or indirectly operate in industries, markets and jurisdictions in which we are exposed to compliance risks and that are subject to significant scrutiny by regulators, governmental authorities and other persons.
Legal compliance risks could result in significant costs to our business or cause us to restrict current activities or curtail growth plans. We directly or indirectly operate in industries, markets and jurisdictions in which we are exposed to compliance risks and that are subject to significant scrutiny by regulators, governmental authorities and other persons.
We have developed and implemented strategies to mitigate previously implemented and, in some cases, proposed tariff increases, but there is no assurance we will be able to continue to mitigate prolonged tariffs. The outcome of the 2024 U.S. presidential elections may have a significant impact on U.S. domestic and global tariffs.
We have developed and implemented strategies to mitigate previously implemented and, in some cases, proposed tariff increases, but there is no assurance we will be able to continue to mitigate prolonged tariffs.
We rely on our supply chain for components and raw materials to manufacture our products and provide services to our customers, and this reliance could have an adverse impact on our business and operating results.
We rely on our supply chain for components and raw materials to manufacture our products and provide services to our customers.
These divestitures pose risks and challenges that could negatively impact our business, including retained liabilities related to divested businesses, obligations to indemnify buyers against contingent liabilities and potential disputes with buyers.
In connection with the execution of our strategy to become a pure-play industrial tools and services company, we have completed several divestitures. These divestitures pose risks and challenges that could negatively impact our business, including retained liabilities related to divested businesses, obligations to indemnify buyers against contingent liabilities and potential disputes with buyers.
Growth in the global economy may exacerbate these pressures on us and our suppliers, and we expect these supply chain challenges and cost impacts may continue to impact us in the future.
We have in the recent past experienced supply shortages and inflationary pressures for certain components and raw materials that were important to our manufacturing proc ess. Growth in the global economy may exacerbate these pressures on us and our suppliers, and we expect these supply chain challenges and cost impacts may continue to impact us in the future.
"ASCEND Transformation Program" and Note 4 , " Restructuring Charges," in the notes to the consolidated financial statements and "Business Update" within Item 7 for further discussion of the ASCEND program and other current restructuring activities).
"ASCEND Transformation Program" and Note 4, "Restructuring Charges," in the notes to the consolidated financial statements and "Business Update" within Item 7 for further discussion of the ASCEND program and other current restructuring activities). A material disruption at a significant manufacturing facility could adversely affect our ability to generate sales and result in increased costs that we cannot recover.
In March 2022, we announced the launch of ASCEND, a transformation program focused on driving accelerated earnings growth and efficiency across the business with the goal of delivering improved annual operating profit once fully implemented.
As of August 31, 2024, ASCEND, a transformation program focused on driving accelerated earnings growth and efficiency across the business with the goal of delivering improved annual operating profit was completed, with total program costs of $75 million.
Further, for certain of our services business agency relationships, we utilize intermediary agents and are dependent on our agents to collect payment on our behalf. The indirect sales channels expose us to the credit risk of both our channel partners and end customers and increase the risk of delayed payments or uncollectible balances.
Further, for certain of our services business agency relationships, we utilize intermediary agents and are dependent on our agents to collect payment on our behalf.
Removed
We have in the recent past experienced supply shortages and inflationary pressures for certain components and raw materials that were important to our manufacturing proc ess due to a number of the factors described above.
Added
In the past year, the U.S. government has imposed significant tariffs impacting a wide variety of goods across multiple countries and indicated that additional tariffs may be imposed in the near future.
Removed
For example, during the year ended August 31, 2022, we recognized a $13.2 million bad debt reserve as a result of the continued payment delinquency of one of our agents. A liquidity event or dispute involving one of our channel partners may adversely affect our results of operations and financial condition .
Added
In response, some countries have announced or imposed tariffs on goods made in the U.S, along with other trade restrictions, such as export restrictions on certain goods, including critical minerals, produced in their countries.
Removed
A material disruption at a significant manufacturing facility could adversely affect our ability to generate sales and result in increased costs that we cannot recover.
Added
These actions could depress demand for our products or increase the cost to manufacture our products, which may affect the competitiveness of our products relative to manufacturers not affected by such actions. Moreover, protracted trade disputes and uncertainty with respect to tariffs and trade agreements can adversely affect general economic conditions.
Removed
In connection with the execution of our strategy to become a pure-play industrial tools and services company, we have completed several divestitures, including the divestiture of our former EC&S segment.
Added
All of these outcomes could have a material adverse effect on our business, financial condition, results of operations and cash flow.
Removed
In addition, changes in laws or regulations, for example, the proposed regulations of the Securities and Exchange Commission with respect to climate-related disclosures, may significantly increase our costs, adversely affecting our results of operations. Legal compliance risks could result in significant costs to our business or cause us to restrict current activities or curtail growth plans.
Added
The indirect sales channels expose us to the credit risk of both our channel partners and end customers and increase the risk of delayed payments or uncollectible balances, which has occurred in the past and may occur again. A liquidity event or dispute involving one of our channel partners may adversely affect our results of operations and financial condition.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition.
Biggest changeWe have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, our operations, business strategy, results of operations, or financial condition. However, we face risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, our operations, business strategy, results of operations, or financial condition.
Our cybersecurity risk management program is integrated into our overall enterprise risk management program and shares common methodologies, reporting channels, and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Our cybersecurity risk management program is integrated into our overall enterprise risk management program and shares common methodologies, reporting channels, and governance processes that apply across the enterprise risk management 14 program to other legal, compliance, strategic, operational, and financial risk areas.
Our cybersecurity risk management program includes: • risk assessments designed to help identify material cybersecurity risks to our critical systems and information; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls; 14 • cybersecurity awareness training of our employees, including our incident response personnel; • tabletop exercises conducted at the management level to ensure the Company is prepared in the event of a cybersecurity incident and to help identify areas of improvement for the cyber security incident response and risk management programs; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents, cybersecurity resilience and recovery; and • a third-party risk management process for service providers, suppliers, and vendors who access our critical systems and data.
Our cybersecurity risk management program includes: • risk assessments designed to help identify material cybersecurity risks to our critical systems and information; • a security team principally responsible for managing our cybersecurity risk assessment processes, security controls, and responses to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise enhance our security controls; • cybersecurity awareness training of our employees, including our incident response personnel; • tabletop exercises conducted at the management level to ensure the Company is prepared in the event of a cybersecurity incident and to help identify areas of improvement for the cyber security incident response and risk management programs; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents, cybersecurity resilience and recovery; and • a third-party risk management process for service providers, suppliers, and vendors who access our critical systems and data.
Our Audit Committee receives regular reports from management on our cybersecurity risks, and our full Board receives a periodic update. In addition, management updates the Audit Committee, as necessary, regarding any material cybersecurity incidents, as well as significant incidents. Our Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity.
Our Audit Committee receives regular reports from management on our cybersecurity risks, and our full Board receives periodic updates. In addition, management updates the Audit Committee, as necessary, regarding any material or significant cybersecurity incidents. Our Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity.
Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to its Audit Committee oversight of cybersecurity and other information technology risks. Our Audit Committee oversees management’s implementation of our cybersecurity risk management program.
See Item 1A "Risk Factors" . Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to its Audit Committee oversight of cybersecurity and other information technology risks. Our Audit Committee oversees management’s implementation of our cybersecurity risk management program.
The frameworks used to design and assess our program include the National Institute of Standards and Technology Cybersecurity Framework and Sarbanes Oxley. This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use these frameworks as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use these frameworks as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
Removed
We face risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition. See Item 1A "Risk Factors " .
Added
The frameworks used to design and assess our program include the National Institute of Standards and Technology Cybersecurity Framework and The Sarbanes-Oxley Act of 2002.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperties As of August 31, 2024, we owned or leased the following facilities (square footage in thousands): Number of Locations Square Footage Distribution / Sales / Admin Manufacturing Total Owned Leased Total Industrial Tools & Services 10 35 45 132 1,181 1,313 Corporate and Other 2 2 4 26 173 199 12 37 49 158 1,354 1,512 We consider our facilities suitable and adequate for the purposes for which they are used and do not anticipate difficulty in renewing existing leases as they expire or in finding alternative facilities.
Biggest changeProperties As of August 31, 2025, we owned or leased the following facilities (square footage in thousands): Number of Locations Square Footage Distribution / Sales / Admin Manufacturing Total Owned Leased Total Industrial Tools & Services 10 33 43 207 1,009 1,216 Corporate and Other 1 1 2 — 92 92 11 34 45 207 1,101 1,308 We consider our facilities suitable and adequate for the purposes for which they are used and do not anticipate difficulty in renewing existing leases as they expire or in finding alternative facilities.
Our largest facilities are located in the United States, the Netherlands, China and the United Kingdom. We also maintain a presence in Algeria, Australia, Brazil, France, Germany, Kazakhstan, India, Italy, Japan, Norway, Poland, Saudi Arabia, Singapore, South Africa, South Korea, Spain and the United Arab Emirates.
Our largest facilities are located in the United 15 States, the Netherlands, China, the United Kingdom and Spain. We also maintain a presence in Algeria, Australia, Brazil, France, Germany, Kazakhstan, India, Italy, Japan, Norway, Poland, Saudi Arabia, Singapore, South Africa, South Korea, and the United Arab Emirates.
See Note 10, “Leases” in the notes to the consolidated financial statements for information regarding our lease commitments.
See Note 11, “Leases” in the notes to the consolidated financial statements for information regarding our lease commitments.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings We are a party to various legal proceedings that have arisen in the normal course of business. These legal proceedings typically include product liability, breaches of contract, employment, personal injury and other disputes. 15 We have recorded reserves for estimated losses based on the specific circumstances of each case.
Biggest changeItem 3. Legal Proceedings We are a party to various legal proceedings that have arisen in the normal course of business. These legal proceedings typically include product liability, breaches of contract, employment, personal injury and other disputes. We have recorded reserves for estimated losses based on the specific circumstances of each case.
Information with respect to contingencies arising from legal proceedings, including governmental investigations, set forth in Note 16, “Commitments and Contingencies” in the notes to the consolidated financial statements, is incorporated by reference. Item 4. Mine Safety Disclosures Not applicable. 16 PART II
Information with respect to contingencies arising from legal proceedings, including governmental investigations, set forth in Note 17, “Commitments and Contingencies” in the notes to the consolidated financial statements, is incorporated by reference. Item 4. Mine Safety Disclosures Not applicable. 16 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod Shares Repurchased Average Price Paid per Share Maximum Number of Shares That May Yet Be Purchased Under the Program June 1 to June 30, 2024 — $ — 2,860,748 July 1 to July 31, 2024 — — 2,860,748 August 1 to August 31, 2024 143,699 39.40 2,717,049 143,699 $ 39.40 17 Performance Graph The graph and table b elow compare the cumulative 5-year total return of the Company's Class A common stock with the cumulative total returns of the Russell 2000 Index and the S&P 600 Industrial Index.
Biggest changeThe new share repurchase authorization replaces the prior authorization except to the extent of purchases under the Company’s Rule 10b5-1 plan then in place. 17 Performance Graph The graph and table b elow compare the cumulative 5-year total return of the Company's Class A common stock with the cumulative total returns of the Russell 2000 Index and the S&P 600 Industrial Index.
Fiscal year ending August 31. Copyright© 2024 Standard & Poor's, a division of S&P Global. All rights reserved. Copyright© 2024 Russell Investment Group.
Fiscal year ending August 31. Copyright© 2025 Standard & Poor's, a division of S&P Global. All rights reserved. Copyright© 2025 Russell Investment Group.
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities The Company’s Cla ss A common stock is traded on the New York Stock Exchange under the symbol EPAC. As of September 30, 2024, there were 672 shareholde rs of record of the Company's Class A common stock.
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities The Company’s Cla ss A common stock is traded on the New York Stock Exchange under the symbol EPAC. As of September 30, 2025, there were 781 shareholde rs of record of the Company's Class A common stock.
In fiscal 2023, the Company declared a dividend of $0.04 per share of Class A common stock payable on October 18, 2023 to shareholders of record on October 6, 2023. Share Repurchases The Company's Board of Directors has authorized the repurchase of shares of the Company's common stock under publicly announced share repurchase programs.
In fiscal 2024, the Company declared a dividend of $0.04 per share of Class A common stock payable on October 18, 2024 to shareholders of record on October 7, 2024. Share Repurchases The Company's Board of Directors has authorized the repurchase of shares of the Company's common stock under publicly announced share repurchase programs.
They assume that the value of the investment in our Class A common stock for the last trading day of each fiscal year, in each index, and in the peer group (in each case, including reinvestment of dividends) was $100 on August 31, 2019 and tracks it through August 31, 2024. *$100 Invested on 8/31/19 in stock or index, including reinvestment of dividends.
They assume that the value of the investment in our Class A common stock for the last trading day of each fiscal year, in each index, and in the peer group (in each case, including reinvestment of dividends) was $100 on August 31, 2020 and tracks it through August 31, 2025. *$100 Invested on 8/31/20 in stock or index, including reinvestment of dividends.
Dividends In fiscal 2024, the Company declared a dividend of $0.04 per share of Class A common stock payable on October 18, 2024 to shareholders of record on October 7, 2024.
Dividends In fiscal 2025, the Company declared a dividend of $0.04 per share of Class A common stock payable on October 17, 2025 to shareholders of record on October 7, 2025.
In addition to the initial share retirement, the Company repurchased and retired 240,972 shares during the year-ended August 31, 2024. The following table summarizes share repurchases during the fourth quarter of fiscal 2024, all of which were purchased under publicly announced share repurchase programs.
The following table summarizes share repurchases during the fourth quarter of fiscal 2025, all of which were purchased under publicly announced share repurchase programs.
All rights reserved. 8/19 8/20 8/21 8/22 8/23 8/24 Enerpac Tool Group Corp. $ 100.00 $ 93.82 $ 113.74 $ 87.87 $ 118.90 $ 187.42 Russell 2000 Index 100.00 106.02 155.94 128.05 134.01 158.76 S&P 600 Industrial Index 100.00 103.94 150.50 139.60 168.90 213.20 The stock price performance included in this graph is not necessarily indicative of future stock price performance. 18 Item 6. [ Reserved]
All rights reserved. 8/20 8/21 8/22 8/23 8/24 8/25 Enerpac Tool Group Corp. $ 100.00 $ 121.23 $ 93.65 $ 126.72 $ 199.76 $ 205.28 Russell 2000 Index 100.00 147.08 120.78 126.40 149.74 161.97 S&P 600 Industrial Index 100.00 144.79 134.30 162.50 205.11 236.27 The stock price performance included in this graph is not necessarily indicative of future stock price performance. 18 Item 6. [ Reserved]
Since the inception of the initial share repurchase program in fiscal 2012, the Company has repurchased 30,082,181 shares of common stock for $839 million. 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.
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. As of August 31, 2025, the maximum number of shares that may yet be purchased under this authorization is 1,017,849 shares.
Removed
As of August 31, 2024, the maximum number of shares that may yet be purchased under this authorization is 2,717,049 shares. In December 2023, the Company's Board of Directors authorized the retirement of the Company's repurchased shares, and the Company retired 29,841,209 treasury shares.
Added
In December 2023, the Company's Board of Directors authorized the retirement of the Company's repurchased shares. The Company repurchased and retired 1,309,466 shares for $38.4 million in fiscal 2024 and 1,699,200 shares for $68.7 million in fiscal 2025.
Removed
The initial share retirement resulted in reductions of $6.0 million in Class A Common Stock and $824.6 million in Retained Earnings reflected in the Condensed Consolidated Balance Sheets at August 31, 2024. Shares repurchased after December 18, 2023 were retired upon repurchase.
Added
Period Shares Repurchased Average Price Paid Per Share Maximum Number of Shares that May Yet Be Purchased Under the Program Jun 1 to June 30, 2025 36,498 $ 42.42 2,020,501 Jul 1 to July 31, 2025 796,920 38.35 1,223,581 Aug 1 to August 31, 2025 205,732 39.06 1,017,849 1,039,150 $ 38.63 On October 10, 2025 , the Company’s Board of Directors authorized the repurchase of shares of the Company’s common stock for up to $200 million .
Added
The Company’s management is authorized to determine the timing and amount of any such repurchases based on its evaluation of market conditions, capital alternatives, and other factors.
Added
Purchases under this authorization may be effected from time to time in both open market and privately negotiated transactions and may also be made under Rule 10b5-1 plans, which permit the Company to repurchase shares when it otherwise would be precluded from doing so under insider trading laws.
Added
This new share repurchase authorization expires on October 31, 2029 or earlier as may be determined by the Company’s Board of Directors or an authorized committee.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

50 edited+23 added−47 removed40 unchanged
Biggest changeThe Company recorded a net gain of $6 million, see additional discussion in Note 5, "Discontinued Operations and Other Divestiture Activities" in the notes to the consolidated financial statements. 20 Historical Financial Data The following table and corresponding year-over-year analysis sets forth our results of continuing operations (dollars in millions, except per share amounts): Year Ended August 31, 2024 2023 2022 Statements of Earnings Data: (1) Net sales $ 590 100 % $ 598 100 % $ 571 100 % Cost of products sold 288 49 % 303 51 % 306 54 % Gross profit 301 51 % 295 49 % 265 46 % Selling, general and administrative expenses 169 29 % 205 34 % 217 38 % Amortization of intangible assets 3 1 % 5 1 % 7 1 % Restructuring charges 7 1 % 7 1 % 8 1 % Impairment & divestiture (benefit) charges — — % (6) (1) % 2 — % Operating profit 122 21 % 84 14 % 31 5 % Financing costs, net 14 2 % 12 2 % 4 1 % Other expense, net 3 1 % 3 1 % 2 — % Earnings before income tax expense 106 18 % 69 12 % 24 4 % Income tax expense 23 4 % 15 3 % 4 1 % Net earnings $ 82 14 % $ 54 9 % $ 20 3 % Other Financial Data: (1) Depreciation $ 10 $ 11 $ 12 Capital expenditures 11 9 8 (1) Results are from continuing operations and exclude the financial results of previously divested businesses reported as discontinued operations.
Biggest changeThe following summarizes ASCEND transformation charges (in thousands): 2024 2023 Program to Completion ASCEND Expense recorded in Cost of products sold 1,018 924 1,948 ASCEND Expense recorded in SG&A expenses 6,029 34,495 54,134 Total ASCEND Expense 7,047 35,419 56,082 Recorded with Restructuring charges 7,843 7,719 18,612 Total ASCEND Transformation Charges $ 14,890 $ 43,138 $ 74,694 Historical Financial Data The following table and corresponding year-over-year analysis sets forth our results of continuing operations (dollars in millions, except per share amounts): Year Ended August 31, 2025 2024 2023 Statements of Earnings Data: (1) Total net sales $ 617 100 % $ 590 100 % $ 598 100 % Total cost of products sold 305 49 % 288 49 % 303 51 % Gross profit 312 51 % 301 51 % 295 49 % Selling, general and administrative expenses 167 27 % 169 29 % 205 34 % Amortization of intangible assets 6 1 % 3 1 % 5 1 % Restructuring charges 6 1 % 7 1 % 7 1 % Impairment & divestiture charges — — % — — % (6) (1) % Operating profit 133 22 % 122 21 % 84 14 % Financing costs, net 10 2 % 14 2 % 12 2 % Other expense, net 3 0 % 3 1 % 3 — % Earnings before income tax expense 121 20 % 106 18 % 69 12 % Income tax expense 28 5 % 23 4 % 15 3 % Net earnings from continuing operations $ 93 15 % $ 82 14 % $ 54 9 % Other Financial Data: (1) Depreciation $ 2 $ 2 $ 1 Capital expenditures 19 11 9 (1) Results are from continuing operations and exclude the financial results of previously divested businesses reported as discontinued operations.
The increase in Product organic sales was driven by pricing actions and mix within the IT&S product offerings; however, this was partially offset by a decrease in organic sales in the Cortland Medical business due to softness in demand related to certain surgical procedures utilizing Cortland Biomedical products.
The increase in product organic sales was driven by pricing actions and mix within the IT&S product offerings; however, this was partially offset by a decrease in product organic sales in the Cortland Medical business due to softness in demand related to certain surgical procedures utilizing Cortland Biomedical products.
Service sales were $116 million, an increase of 7% compared to the prior fiscal year. Foreign currency impact was nearly flat, resulting in a 7% increase in organic Service sales over the prior fiscal year.
Service sales were $116 million, an increase of 7% compared to the prior fiscal year. Foreign currency impact was nearly flat, resulting in a 7% increase in service organic sales over the prior fiscal year.
The organic sales increase in the Service business was due to strong growth within our EMEA region from increased work scopes, higher maintenance activity in the North Sea and projects delayed from the prior fiscal year taking place during fiscal 2024. Gross profit as a percentage of sales was approximately 51% in fiscal 2024, 2% higher than fiscal 2023.
The service organic sales increase was due to strong growth within our EMEA region from increased work scopes, higher maintenance activity in the North Sea and projects delayed from the prior fiscal year taking place during fiscal 2024. Gross profit as a percentage of sales was approximately 51% in fiscal 2024, 2% higher than fiscal 2023.
We intend to allocate the cash flow that results from the execution of our strategy in a disciplined way toward investment in our businesses, 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.
We intend to allocate the cash flow that results from the execution of our strategy in a disciplined way toward investment in our businesses, maintaining our strong balance sheet, disciplined M&A program and opportunistically returning capital to shareholders. We anticipate the compounding effect of reinvesting in our business will fuel further growth and profitable returns.
We had approximately $14 million of cash used in investing activities from continuing operations, which is a $25 million decrease from the prior fiscal year, due principally to the $20 million in proceeds from the sale of the Cortland Industrial business in the fourth qu arter of fiscal 2023, net of the $1 million in working capital adjustments settled during fiscal 2024 (see Note 5, "Discontinued Operations and Other Divestiture Activities" in the notes to the consolidated financial statements for further detail on the divestiture).
We had approximately $14 million of cash used in investing activities from continuing operations for fiscal 2024, which is a $25 million decrease from the prior fiscal year, due principally to the $20 million in proceeds from the sale of the Cortland Industrial business in the fourth qu arter of fiscal 2023, net of the $1 million in working capital adjustments settled during fiscal 2024 (see Note 6, "Discontinued Operations and Other Divestiture Activities" in the notes to the consolidated financial statements for further detail on the divestiture).
Income Tax Expense The Company's income tax expense is impacted by a number of factors, including, among others, the amount of taxable earnings generated in foreign jurisdictions with tax rates that are different than the U.S. federal statutory rate, permanent items, state tax rates, changes in tax laws, acquisitions and divestitures and the ability to utilize various tax credits and net operating loss carryforwards.
Income Tax Expense The Company's i ncome tax expense is impacted by a number of factors, including, among others, the amount of taxable earnings generated in foreign jurisdictions with tax rates that are different than the U.S. federal statutory rate, permanent items, state tax rates, changes in tax laws, acquisitions and divestitures and the ability to utilize various tax credits and net operating loss carryforwards.
If the LIFO method were not used, inventory balances would be higher than amounts presented in the Consolidated Balance Sheet by $18 million at both August 31, 2024 and 2023. We perform an analysis on historical sales usage of individual inventory items on hand and record a reserve to adjust inventory cost to net realizable value, if necessary.
If the LIFO method were not used, inventory balances would be higher than amounts presented in the Consolidated Balance Sheet by $18 million at both August 31, 2025 and 2024. We perform an analysis on historical sales usage of individual inventory items on hand and record a reserve to adjust inventory cost to net realizable value, if necessary.
Based on information provided by independent actuaries and other relevant sources, we believe that the assumptions used are reasonable; however, changes in these assumptions could impact our financial position, results of operations or cash flow. See Note 11, “Employee Benefit Plans” in the notes to the consolidated financial statements for further discussion.
Based on information provided by independent actuaries and other relevant sources, we believe that the assumptions used are reasonable; however, changes in these assumptions could impact our financial position, results of operations or cash flow. See Note 12, “Employee Benefit Plans” in the notes to the consolidated financial statements for further discussion.
The timing of principal payments associated with our revolving line of credit are disclosed in Note 7, "Debt" in the notes to the consolidated financial statements. We pay interest monthly based on prevailing interest rates at the time and the balance outstanding on our revolving line of credit. Our lease contracts are primarily for real estate, vehicles, and manufacturing equipment.
The timing of principal payments associated with our revolving line of credit are disclosed in Note 8, "Debt" in the notes to the consolidated financial statements. We pay interest monthly based on prevailing interest rates at the time and the balance outstanding on our revolving line of credit. Our lease contracts are primarily for real estate, vehicles, and manufacturing equipment.
Financial information related to the Company's reportable segment is included in Note 15, "Business Segment, Geographic and Customer Information" in the notes to the consolidated financial statements. Business Update Our businesses provide an array of products and services across multiple markets and geographies which results in significant diversification.
Financial information related to the Company's reportable segment is included in Note 16, "Business Segment, Geographic and Customer Information" in the notes to the consolidated financial statements. Business Update Our businesses provide an array of products and services across multiple markets and geographies which results in significant diversification.
We determine the discount rate assumptions by referencing high-quality, long-term bond rates that are matched to the duration of our benefit obligations, with appropriate consideration of local market factors, participant demographics and benefit payment forecasts. At August 31, 2024 and 2023, the discount rates on domestic benefit plans were 5.0% and 5.4%, respectively.
We determine the discount rate assumptions by referencing high-quality, long-term bond rates that are matched to the duration of our benefit obligations, with appropriate consideration of local market factors, participant demographics and benefit payment forecasts. At August 31, 2025 and 2024, the discount rates on domestic benefit plans were 5.2% and 5.0%, respectively.
While the ultimate responsibility resides with management, for certain acquisitions we retain the services of certified valuation specialists to assist with assigning estimated values to certain acquired assets and assumed liabilities, including intangible assets and tangible long-lived assets.
While the ultimate responsibility resides with management, for certain acquisitions we retain the services of certified valuation specialists to assist with assigning estimated values to certain acquired assets, including intangible assets and tangible long-lived assets, and assumed liabilities including earn-out obligations.
Additional detail regarding contingencies is included in Note 16, "Commitments and Contingencies" in the notes to the consolidated financial statements, which is incorporated by reference.
Additional detail regarding contingencies is included in Note 17, "Commitments and Contingencies" in the notes to the consolidated financial statements, which is incorporated by reference.
During fiscal 2023, the Company refinanced its credit facility resulting in an updated senior credit facility (the "Senior Credit Facility") of $600 million, comprised of a $400 million revolving line of credit and a $200 million term loan, which will mature in September 2027.
During fiscal 2023, the Company refinanced its credit facility resulting in an updated senior credit facility (the "Senior Credit Facility") of $600 million, comprised of a $400 million revolving line of credit and a $200 million term loan, which will mature in September 2027. The Senior Credit Facility contains restrictive covenants and financial covenants.
See Note 7, "Debt" in the notes to the consolidated financial statements for further details of the Senior Credit Facility. The Company was in compliance with all covenants, including the financial covenants, under the Senior Credit facility at August 31, 2024.
See Note 8, "Debt" in the notes to the consolidated financial statements for further details of the Senior Credit Facility. The Company was in compliance with all covenants, including the financial covenants, under the Senior Credit facility at August 31, 2025.
The expected return on domestic benefit plan assets was 5.7% for each of the fiscal years ended August 31, 2024 and 2023. A 25 basis point change in the assumptions for the discount rate or expected return on plan assets would not have materially changed the fiscal 2024 domestic benefit plan expense.
The expected return on domestic benefit plan assets was 6.2% for each of the fiscal years ended August 31, 2025 and 2024. A 25 basis point change in the assumptions for the discount rate or expected return on plan assets would not have materially changed the fiscal 2025 domestic benefit plan expense.
We had outstanding commercial letters of credit of $4 million and surety bonds of $4 million at August 31, 2024, while we had $9 million of outstanding letters of credit at August 31, 2023. Most of these instruments relate to commercial contracts and self-insured workers’ compensation programs.
We had outstanding commercial letters of credit of $6 million and surety bonds of $5 million at August 31, 2025, while we had $4 million of outstanding letters of credit at August 31, 2024. Most of these instruments relate to commercial contracts and self-insured workers’ compensation programs.
The following table summarizes the cash flow attributable to operating, investing and financing activities (in millions): Year Ended August 31, 2024 2023 2022 Cash provided by operating activities $ 81 $ 78 $ 52 Cash (used in) provided by investing activities (14) 11 (7) Cash used in financing activities (56) (53) (52) Effect of exchange rate changes on cash 2 (2) (12) Net increase (decrease) from cash and cash equivalents $ 13 $ 34 $ (20) Cash flow provided by operations was $81 million for fiscal 2024 and $78 million for fiscal 2023.
The following table summarizes the cash flow attributable to operating, investing and financing activities (in millions): Year Ended August 31, 2025 2024 2023 Cash provided by operating activities $ 111 $ 81 $ 78 Cash (used in) investing activities (46) (14) 11 Cash used in financing activities (81) (56) (53) Effect of exchange rate changes on cash 1 2 (2) Net (decrease) increase from cash and cash equivalents $ (16) $ 13 $ 34 Cash flow provided by operations was $111 million for fiscal 2025 and $81 million for fiscal 2024.
Corporate Corporate consists of selling, general and administrative costs and expenses, including executive, legal, finance, human resources, and information technology, that are not allocated to the segments based on their nature. Corporate expenses were $36 million in fiscal 2024, which was $27 million lower than the fiscal 2023 expenses of $63 million.
Corporate Corporate consists of selling, general and administrative costs and expenses, including executive, legal, finance, human resources, and information technology, that are not allocated to the segments based on their nature. Corporate expenses were $36 million in fiscal 2025, which were flat compared to fiscal 2024 expenses.
The remaining variance is due to higher capital expenditures in fiscal 2024 relating to build-out costs for the company's new headquarters location in Milwaukee, with an anticipated fiscal 2025 move-in date, and purchase of the business assets of Track Tools during the first quarter of fiscal 2024.
The remaining variance was due to higher capital expenditures in fiscal 2024 relating to build-out costs for the company's new headquarters location in Milwaukee and purchase of the business assets of Track Tools during the first quarter of fiscal 2024.
In estimating the fair value of a reporting unit, we generally use a discounted cash flow model, which calculates fair value as the sum of the projected discounted cash flows over a discrete six-year period plus an estimated terminal value.
In conducting a quantitative assessment for goodwill, we generally use a discounted cash flow model, which calculates fair value as the sum of the projected discounted cash flows over a discrete six-year period plus an estimated terminal value.
The summation of the individual components may not equal the total due to rounding. Fiscal 2024 compared to Fiscal 2023 C onsolidated net sales for fiscal 2024 were $590 million, 1% lower than the prior-year sales of $598 million.
The summation of the individual components may not equal the total due to rounding. Fiscal 2025 Compared to Fiscal 2024 C onsolidated net sales for fiscal 2025 were $617 million, 5% higher than the prior-year sales of $590 million.
The following table sets forth the results of operations for the IT&S segment (dollars in millions): Year Ended August 31, 2024 2023 2022 Net Sales $ 571 $ 555 $ 527 Operating Profit 153 136 79 Operating Profit % 26.8 % 24.5 % 14.9 % Fiscal 2024 compared to Fiscal 2023 Fiscal 2024 net sales were $571 million, an increase of $16 million, or 3% from fiscal 2023 sales of $555 million.
The following table sets forth the results of operations for the IT&S segment (dollars in millions): Year Ended August 31, 2025 2024 2023 Net Sales $ 596 $ 571 $ 555 Operating Profit 164 153 136 Operating Profit % 27.5 % 26.8 % 24.5 % Fiscal 2025 Compared to Fiscal 2024 Fiscal 2025 net sales were $596 million, an increase of $25 million, or 4% from fiscal 2024 sales of $571 million.
Our customer base generally consists of financially reputable distributors, agents, OEMs, and other customers with whom we have long standing relationships, and historically we have not experienced significant write off of accounts receivables as a percentage of our annual net sales (accounts receivable written off as a percentage of net sales was less than 0.5% for each the years ended August 31, 2024, 2023, and 2022, respectivel y).
Our customer base generally consists of financially reputable distributors, agents, OEMs, and other customers with whom we have long standing relationships, and historically we have not experienced significant bad debt 24 expense as a percentage of our annual net sales (bad debt expense as a percentage of net sales was less than 0.5% for each the years ended August 31, 2025, 2024, and 2023 ).
The inventory valuation assumptions used are based on historical experience. We believe that such estimates are made based on consistent and appropriate methods; however, actual results may differ from these estimates under different assumptions or conditions.
The inventory valuation assumptions used are based on historical experience. We believe that such estimates are made based on consistent and appropriate methods; however, actual results may differ from these estimates under different assumptions or conditions. Goodwill and Indefinite-lived intangibles: Goodwill, trademarks and certain tradenames have indefinite lives and are not amortized.
The fiscal 2024 effective tax rate was slightly higher than the statutory 21% primarily as a result of state income taxes and taxes in foreign jurisdictions with rates higher than the U.S. which were partially offset by one-time tax benefits related to the lapse of the statute of limitations on uncertain tax positions and global tax planning initiatives that will not repeat in future periods due to certain tax attributes that are no longer available. 23 Liquidity and Capital Resources At August 31, 2024, cash and cash equivalents were $167 million, comprised of $111 million of cash held by foreign subsidiaries and $56 million held domestically.
The fiscal 2025 effective tax rate was slightly higher than the statutory 21% primarily as a result of state income taxes and taxes in foreign jurisdictions with rates higher than the U.S. which were partially offset by one-time tax benefits related to the lapse of the statute of limitations on uncertain tax positions, tax benefits related to stock compensation, and global tax planning initiatives that will not repeat in future periods due to certain tax attributes that are no longer available.
Accounts receivable, net was $104 million as of August 31, 2024 , which is net of a $16 million allowance for credit losses.
Accounts receivable, net was $106 million as of August 31, 2025 , which is net of a $4 million allowance for credit losses.
The following table shows the components of our primary working capital (dollars in millions): August 31, 2024 August 31, 2023 $ PWC % $ PWC % Accounts receivable, net $ 104 16 % $ 98 15 % Inventory, net 73 12 % 75 12 % Accounts payable (43) (7) % (51) (8) % Net primary working capital $ 134 21 % $ 122 19 % Total primary working capital was $134 million at August 31, 2024, which increased from $122 million at August 31, 2023.
The following table shows the components of our primary working capital (dollars in millions): August 31, 2025 August 31, 2024 $ PWC % $ PWC % Accounts receivable, net $ 106 16 % $ 104 16 % Inventory, net 79 12 % 73 12 % Accounts payable (43) (6) % (43) (7) % Net primary working capital $ 142 21 % $ 134 21 % 23 Total primary working capital was $142 million at August 31, 2025, which increased from $134 million at August 31, 2024.
The unused credit line and amount available for borrowing under the revolving line of credit of the Senior Credit Facility was $398 million at August 31, 2024. 24 We believe that the revolving credit facility under the Senior Credit Facility, 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.
We believe that the revolving credit facility under the Senior Credit Facility, 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.
Actual collections from the agent may differ from the Company's estimate. Inventories: Inventory cost is determined using the last-in, first-out (“LIFO”) method for a portion of U.S. owned inventory (approximately 49% and 48% of total inventories at August 31, 2024 and 2023, respectively).
Inventories: Inventory cost is determined using the last-in, first-out (“LIFO”) method for a portion of U.S. owned inventory (approximately 47% and 49% of total inventories at August 31, 2025 and 2024, respectively).
If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded.
If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded. We perform our goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount.
Some of these differences are permanent, such as expenses that are not tax deductible, while others are temporary differences, such as amortization and depreciation expenses. 27 Temporary differences create deferred tax assets and liabilities, which are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
Temporary differences create deferred tax assets and liabilities, which are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
Pre-tax earnings, income tax expense and effective income tax rate from continuing operations for the past three fiscal years were as follows (dollars in thousands): Year Ended August 31, 2024 2023 2022 Earnings before income tax expense $ 105,519 $ 68,898 $ 23,992 Income tax expense 23,312 15,249 4,401 Effective income tax rate 22.1 % 22.1 % 18.3 % The comparability of pre-tax earnings, income tax expense and the related effective income tax rates are impacted by impairment and other divestiture charges and benefits.
Pre-tax earnings, income tax expense and effective income tax rate from continuing operations for the past three fiscal years were as follows (dollars in thousands): Year Ended August 31, 2025 2024 2023 Earnings before income tax expense $ 120,729 $ 105,519 $ 68,898 Income tax expense 27,980 23,312 15,249 Effective income tax rate 23.2 % 22.1 % 22.1 % The fiscal 2025 and fiscal 2024 effective tax rates were 23.2% and 22.1%, respectively.
The increase in net financing costs for both fiscal 2023 to fiscal 2024 and fiscal 2022 to fiscal 2023 was due to the year-over-year increase in interest rates and debt levels during each succeeding fiscal year.
The decrease in net financing costs for fiscal 2025 to fiscal 2024 was due to a mix of lower debt balances and lower interest rates. The increase in net financing costs for fiscal 2023 to fiscal 2024 was due to the year-over-year increase in interest rates and debt levels.
We have long-term obligations related to our deferred compensation, pension and postretirement plans that are summarized in Note 11, “Employee Benefit Plans” in the notes to the consolidated financial statements. 25 As part of our 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.
As part of our 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.
Both the fiscal 2024 and prior-year income tax provisions were impacted by the mix of earnings in foreign jurisdictions with income tax rates different than the U.S. federal income tax rate and income tax benefits from global tax planning initiatives. The fiscal 2024 and 2023 effective tax rate were both 22.1%.
Both the fiscal 2025 and fiscal 2024 income tax provisions were impacted by the mix of earnings in foreign jurisdictions with income tax rates different than the U.S. federal income tax rate and income tax benefits from global tax planning initiatives. On July 4, 2025, H.R. 1, “An Act to provide for reconciliation pursuant to title II of H. Con.
The reduction in payables is related to the decrease in our ASCEND transformation program charges. Capital Expenditures The majority of our manufacturing activities consist of assembly operations. We believe that our capital expenditure requirements are not as extensive as other industrial companies given the nature of our operations.
The increase in inventory is due to the impact of the incremental tariffs put in place during fiscal 2025. Capital Expenditures The majority of our manufacturing activities consist of assembly operations. We believe that our capital expenditure requirements are not as extensive as other industrial companies given the nature of our operations.
Management refers to sales adjusted to exclude the impact of these items, foreign currency changes and recent acquisitions and divestitures, as "organic sales", which we formerly referred to as "core sales".
Management refers to sales adjusted to exclude the impact of these items (foreign currency changes and recent acquisitions and divestitures) as "organic sales". Product sales increased 6% to $500 million, compared to the prior fiscal year.
The SG&A decrease was primarily due to lower ASCEND transformation program charges ($28 million), M&A charges ($1 million) and leadership transition charges ($1 million), as well as reduced incentive compensation expense. 21 Fiscal 2023 compared to Fiscal 2022 C onsolidated net sales for fiscal 2023 were $598 million, 5% higher than the prior-year sales of $571 million.
Operating profit was impacted by the increased gross profit noted above, as well as a reduction of SG&A expense of $36 million compared to the prior fiscal year. The SG&A decrease was primarily due to lower ASCEND transformation program charges ($28 million), M&A charges ($1 million) and leadership transition charges ($1 million), as well as reduced incentive compensation expense.
Capital expenditures associated with continuing operations were $11 million, $9 million and $8 million in fiscal 2024, 2023 and 2022, respectively. During fiscal 2024 we began the build-out of a new downtown Milwaukee location for Enerpac Tool Group. We expect to relocate our corporate headquarters to the building during fiscal 2025.
Capital expenditures associated with continuing operations were $19 million , $11 million and $9 million in fiscal 2025, 2024 and 2023, respectively. The increase in capital expenditures during fiscal 2025 is primarily related to build-out costs for the Company's new headquarters location in Milwaukee, Wisconsin.
While we believe our judgments and assumptions are reasonable, different assumptions could change the estimated fair values and, therefore, future additional impairment charges could be required.
A considerable amount of management judgment is required in performing impairment tests, principally in determining the fair value of each reporting unit and the indefinite-lived intangible assets. While we believe our judgments and assumptions are reasonable, different assumptions could change the estimated fair values and, therefore, future additional impairment charges could be required.
General Business Update In March 2022, the Company announced the start of its ASCEND transformation program (“ASCEND”), initially estimating an incremental $40 to $50 million of annual operating profit once fully implemented.
General Business Update In March 2022, the Company announced the start of its ASCEND transformation program (“ASCEND”).
This decrease was primarily due to a reduction in ASCEND transformation program charges in fiscal 2024 ($25 million). Corporate expenses were $63 million in fiscal 2023 which was $14 million higher than the fiscal 2022 expenses of $49 million. This increase was primarily from ASCEND transformation program expenses ($15 million) and incentive compensation expense.
Corporate expenses in fiscal 2024 were $27 million lower than the fiscal 2023 expenses of $63 million. This decrease was primarily due to a reduction in ASCEND charges in fiscal 2024 ($25 million). Net financing costs were $10 million, $14 million and $12 million in fiscal years 2025, 2024 and 2023, respectively.
ASCEND’s key initiatives include accelerating organic growth 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.
ASCEND’s key initiatives included accelerating organic growth 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. 19 In October 2023, the Company announced that during fiscal 2023, the Company had realized approximately $54 million of annual operating profit from execution of the ASCEND program and would no longer be breaking out the ASCEND benefit from results going into fiscal 2024.
This increase was driven by the aforementioned pricing actions, with some volume contribution and a reduction in SG&A expenses.
This increase was driven by the aforementioned pricing actions, with some volume contribution and a reduction in SG&A expenses. The reduction of SG&A expense was from reduced ASCEND charges ($4 million) and lower incentive compensation expense, partially offset by slightly higher restructuring charges ($1 million) for this segment.
See Note 10, "Leases" in the notes to the consolidated financial statements for future minimum lease payments associated with our lease portfolio.
See Note 11, "Leases" in the notes to the consolidated financial statements for future minimum lease payments associated with our lease portfolio. We have long-term obligations related to our deferred compensation, pension and postretirement plans that are summarized in Note 12, “Employee Benefit Plans” in the notes to the consolidated financial statements.
Acquired intangible assets, excluding goodwill, are valued using discounted cash flow methodology based on future cash flows specific to the type of intangible asset purchased. This methodology incorporates various estimates and assumptions, the most significant being projected revenue growth rates, profit margins and forecasted cash flows based on discount rates and terminal growth rates.
Acquired intangible assets, excluding goodwill, are valued using discounted cash flow methodology based on future cash flows specific to the type of intangible asset purchased. Specifically related to the acquisition of DTA, the Company believes the developed technology intangible asset and the potential contingent earn-out liability required the most significant judgment.
Operating profit was impacted by the increased gross profit noted above, as well as a reduction of Selling, general & administrative ("SG&A") expense of $36 million compared to the prior fiscal year.
The increase in operating profit is primarily due to the flow through of gross profit on the incremental current year sales and lower selling, general & administrative ("SG&A") expense as a percentage of revenue compared to the prior year.
The reduction of SG&A expense was from reduced ASCEND Transformation Program charges ($4 million) and lower incentive compensation expense, partially offset by slightly higher restructuring charges ($1 million) for this segment. 22 Fiscal 2023 compared to Fiscal 2022 Fiscal 2023 net sales were $555 million, an increase of $28 million, or 5%, from fiscal 2022 sales of $527 million, with foreign currency rates unfavorably impacting sales by approximately $11 million, or 3%.
Fiscal 2025 operating profit increased $11 million to $164 million. This increase was driven by the flow-through impact of the increased sales and lower SG&A expense as a percentage of revenue. 21 Fiscal 2024 Compared to Fiscal 2023 Fiscal 2024 net sales were $571 million, an increase of $16 million, or 3% from fiscal 2023 sales of $555 million.
Removed
At the time the company anticipated investing $60 to $65 million through the end of fiscal 2024 to complete these actions. In June 2022, the Company approved a restructuring plan in connection with the initiatives identified as part of the ASCEND transformation program to drive greater efficiency and productivity in global selling, general and administrative resources.
Added
The ASCEND program was completed as of August 31, 2024, with total program costs of $75 million, of which $19 million related to restructuring charges.
Removed
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. (see Note 4, “Restructuring Charges” in the notes to the consolidated financial statements). These costs were incorporated into the initial investment of $60 to $65 million.
Added
The effect of the weakening U.S. dollar on foreign currency rates compared to the prior-year period favorably impacted sales by $2 million, or 1%, and the inclusion of DTA, acquired in the first quarter of fiscal 2025 favorably impacted sales by $20 million, or 3%. This resulted in organic consolidated sales growth of approximately 1% in the year.
Removed
In September 2022, the Company approved an update to the restructuring plan to a range of $10 to $15 million; these costs were still incorporated into the initial investment value and the range did not change at that time.
Added
Foreign currency rate changes favorably impacted product sales by $2 million, or less than 1%, and the acquisition of DTA favorably impacted product sales by $20 million, or 4%. This resulted in product organic sales growth of 1%. This increase in product organic sales was primarily due to growth in the Americas and APAC regions, and the Cortland Medical business.
Removed
In March 2023, the Company increased the estimated investment range to $70 to $75 million, inclusive of the $10 to $15 million of the previously announced restructuring, over the life of the program. 19 In October 2023, the Company announced that during fiscal 2023, the Company had realized approximately $54 million of annual operating profit from execution of the ASCEND program and would no longer be breaking out the ASCEND benefit from results going into fiscal 2024.
Added
This was offset by declines in our EMEA region. Service sales were $117 million, an increase of 1% compared to the prior fiscal year. Foreign currency impact was nearly flat, resulting in a 1% increase in service organic sales over the prior fiscal year.
Removed
Through fiscal 2023, the Company invested approximately $60 million as part of the program, both through program charges and restructuring. Through the end of fiscal 2024 when the ASCEND program concluded, the Company has invested approximately $75 million as part of the program, consisting of $19 million through restructuring and $56 million in ASCEND transformation program charges.
Added
The service organic sales increase in the service business was due to strong growth within our Americas region that was partially offset by declines in activity within our EMEA region. 20 Gross profit as a percentage of sales was approximately 51% in fiscal 2025, remaining consistent with fiscal 2024 .
Removed
The following summarizes ASCEND transformation charges (in thousands): Year-Ended August 31, 2024 2023 2022 Program to Date ASCEND Expense recorded in Cost of products sold 1,018 924 6 1,948 ASCEND Expense recorded in SG&A expenses 6,029 34,495 13,610 54,134 Total ASCEND Expense 7,047 35,419 13,616 56,082 Recorded with Restructuring charges 7,843 7,719 3,050 18,612 Total ASCEND Transformation Charges $ 14,890 $ 43,138 $ 16,666 $ 74,694 Commencing in February 2022, in response to the armed conflict in Ukraine, many countries, including the member countries of NATO, initiated a variety of sanctions and export controls targeting Russia and associated entities.
Added
Operating profit for fiscal 2025 was $133 million, approximately $11 million higher than the prior fiscal year operating profit of $122 million.
Removed
Approximately 1% of our historical annual sales were to customers and distributors associated with Russia and we had approximately $0.5 million of receivables associated with those customers and distributors as of February 28, 2022.
Added
Fiscal 2024 Compared to Fiscal 2023 C onsolidated net sales for fiscal 2024 were $590 million, 1% lower than the prior-year sales of $598 million.
Removed
The sanctions currently in place limit our ability to provide goods to those customers and distributors and banking sanctions effectively negate our ability to collect those receivables; as such, we recorded a full allowance for credit losses against those receivables as of February 28, 2022 and indefinitely suspended doing business in Russia.
Added
The impact of foreign currency was nearly flat and the first quarter acquisition of DTA favorably impacted sales by $20 million, or 3%, resulting in organic sales growth for the segment of approximately 1%. The primary driver of this organic sales increase was strong performance in the Americas and APAC regions.
Removed
We will continue to monitor the situation with Russia to assess when and if we are able to resume business with those customers and distributors, including collection of the outstanding receivables.
Added
Res. 14”, commonly referred to as the "One Big Beautiful Bill Act,” was enacted in the United States. There are multiple business tax provisions for which further guidance from the U.S. Treasury and the Internal Revenue Service is needed.
Removed
We also continue to monitor and manage the ancillary impact of the Russia crisis on our business, which is primarily related to supply chain, increased commodity and energy costs, foreign exchange rate volatility and dealer confidence, particularly in Europe.
Added
The Company has evaluated the impact of the guidance provided to date and determined that it did not have a material impact related to fiscal 2025.
Removed
During the year ended August 31, 2022, the Company recorded through bad debt expense (included in "Selling, general and administrative expenses" in the Condensed Consolidated Statements of Earnings) a reserve of $13 million to fully reserve for the outstanding accounts receivable balance for an agent in our Europe/Middle East/Africa ("EMEA") region.
Added
The Company will continue to evaluate the impact of the various provisions that could affect our income tax payable and deferred tax liability, including changes related to bonus depreciation and the expensing of research and development expenditures, among other topics. 22 Liquidity and Capital Resources At August 31, 2025, cash and cash equivalents were $152 million, comprised of $105 million of cash held by foreign subsidiaries and $47 million held domestically.
Removed
The allowance for credit losses for this particular agent remains unchanged during fiscal 2024 and represents management's best estimate of the probable amount of collection and considers various factors with 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 the agent to end customers, (iii) the status of ongoing negotiations with the agent to secure payments, (iv) legal recourse available to us to secure payment, and (v) the agent is currently in bankruptcy proceedings.
Added
The $30 million increase in cash flow from operations was primarily the result of higher earnings, lower annual incentive compensation payments made in the first quarter of fiscal 2025 compared to the prior-year period and the non-recurrence of payments and funds received for legal settlements related to discontinued operations.
Removed
Actual collections from the agent may differ from the Company's estimate. We have completely ceased our relationship with this agent and have transitioned to serving our regional customers through recently created direct operations within the region.
Added
Net cash used in investing activities was $46 million which is a $32 million increase from the prior fiscal year. The increased use of cash was due to the payment of $27 million for the acquisition of DTA and increased capital expenditures relating to build-out costs for the Company's new headquarters location in Milwaukee, Wisconsin.
Removed
On October 31, 2019, the Company completed the sale of its former EC&S segment to wholly owned subsidiaries of BRWS Parent LLC, a Delaware limited liability company and affiliate of One Rock Capital Partners II, LP, for a purchase price of approximately $216 million (inclusive of final working capital adjustments).
Added
Cash used in financing activities increased to $81 million, for fiscal 2025 compared to $56 million for fiscal 2024. The $25 million increase is primarily driven by increased expenditures for share repurchases. Cash flow provided by operations was $81 million for fiscal 2024 and $78 million for fiscal 2023 .
Removed
The EC&S segment is treated as discontinued operations in our financial statements for all periods included therein. On July 11, 2023, the Company completed the sale of the Cortland Industrial business, for net proceeds of $20 million.
Added
The unused credit line and amount available for borrowing under the revolving line of credit of the Senior Credit Facility was $399 million at August 31, 2025.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+0 added−0 removed4 unchanged
Biggest changeUnder this assumption, annual sales would have been $3 million lower and operating profit would have been less than $1 million lower for the fiscal year ended August 31, 2024.
Biggest changeUnder this assumption, annual sales would have been $8 million lower and operating profit would have been $2 million lower for the fiscal year ended August 31, 2025.
Our more significant non-U.S. operations are located in Australia, the Netherlands, the United Kingdom, Saudi Arabia and China, and we have foreign currency risk relating to receipts from customers, payments to suppliers and intercompany transactions denominated in foreign currencies.
Our more significant non-U.S. operations are located in Australia, the Netherlands, the United Kingdom, Spain, Saudi Arabia and China, and we have foreign currency risk relating to receipts from customers, payments to suppliers and intercompany transactions denominated in foreign currencies.
To illustrate the potential impact of changes in foreign currency exchange rates on the translation of our results of operations, annual sales and operating profit were remeasured assuming a ten percent reduction in foreign exchange rates compared to the U.S. dollar.
To illustrate the potential impact of changes in foreign currency exchange rates on the translation of our results of operations, annual sales and operating profit were remeasured 26 assuming a ten percent reduction in foreign exchange rates compared to the U.S. dollar.
Under certain conditions, we enter into hedging transactions (primarily foreign currency exchange contracts) that enable us to mitigate the potential adverse impact of foreign currency exchange rate risk (see Note 9, “Derivatives” in the notes to the consolidated financial statements for further information).
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).
Similarly, a ten percent decline in foreign currency exchange rates relative to the U.S. dollar on our August 31, 2024 financial position would result in a $35 million reduction to equity (accumulated other comprehensive loss), as a result of non-U.S. dollar denominated assets and liabilities being translated into U.S. dollars, our reporting currency.
Similarly, a ten percent decline in foreign currency exchange rates relative to the U.S. dollar on our August 31, 2025 financial position would result in a $36 million reduction to equity (accumulated other comprehensive loss), as a result of non-U.S. dollar denominated assets and liabilities being translated into U.S. dollars, our reporting currency.
Interest Rate Risk — As of August 31, 2024, long-term debt consisted of no borrowings under the revolving line of credit (variable rate debt) and $200 million of term-loan debt bearing interest based on SOFR (variable rate). An interest-rate swap effectively converts the SOFR-based rate of $60 million of term borrowings under our credit facility to a fixed rate.
Interest Rate Risk — As of August 31, 2025, long-term debt consisted of no borrowings under the revolving line of credit (variable rate debt) and $190 million of term-loan debt bearing interest based on SOFR (variable rate). An interest-rate swap effectively converts the SOFR-based rate of $60 million of term borrowings under our credit facility to a fixed rate.
A ten percent increase in the average costs of our variable-rate debt would have resulted in a $2 million increase in financing costs for the fiscal year ended August 31, 2024 . Foreign Currency Risk — We maintain operations in the U.S. and various foreign countries.
A ten percent increase in the average costs of our variable-rate debt would have resulted in a $1 million increase in financing costs for the fiscal year ended August 31, 2025 . Foreign Currency Risk — We maintain operations in the U.S. and various foreign countries.
We strive to timely pass along such commodity price increases to customers to avoid profit margin erosion. 28
We strive to timely pass along such commodity price increases to customers to avoid profit margin erosion. 27

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