What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-10-17 compared with 2024-10-21 · 253 added, 226 removed, 910 unchanged (34% of the section changed)

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Consolidated Statements of Earnings for the years ended August 31, 2025, 2024 and 2023

Consolidated Statements of Comprehensive Income (Loss) for the years ended August 31, 202 4 , 202 3 and 20 2 2

Consolidated Statements of Comprehensive Income for the years ended August 31, 2025, 2024 and 2023

Consolidated Balance Sheets as of August 31, 2025 and 2024

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Consolidated Statements of Shareholders’ Equity for the years ended August 31, 2025, 2024 and 2023

Notes to C onsolidated F inancial S tatements

Notes to Consolidated Financial Statements

INDEX TO FINANCIAL STATEMENT SCHEDULE

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We have audited the accompanying consolidated balance sheets of Enerpac Tool Group Corp.

(the Company) as of August 31, 2024 and 2023, the related consolidated statements of earnings, comprehensive statement of income (loss), shareholders’ equity and cash flows for each of the three years in the period ended August 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

(the Company) as of August 31, 2025 and 2024, the related consolidated statements of earnings, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended August 31, 2025, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at August 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended August 31, 2025, in conformity with U.S.

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(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

Valuation of Goodwill within the IT&S Segment

Valuation of the potential earn-out and acquired intangible assets

Description of

the Matter At August 31, 2024, the Company’s consolidated goodwill balance was $269.6 million.

Goodwill associated with the IT&S segment was $256.0 million.

As disclosed in Note 1 to the financial statements, Management tests goodwill for impairment annually during the fourth quarter, or more frequently if events or changes in circumstances indicate that goodwill might be impaired.

In estimating fair value, management utilizes a discounted cash flow model, which is dependent on a number of assumptions, most significantly forecasted revenues and operating profit margins, and the weighted average cost of capital.

Auditing management’s goodwill impairment test within the IT&S segment was complex and highly judgmental due to the significant estimation required to determine the fair value of certain reporting units evaluated for impairment using a quantitative assessment.

In particular, the fair value estimate was sensitive to significant assumptions over forecasted revenues, operating profit margins, and the weighted average cost of capital.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment review process, including controls over management's review of the significant assumptions used to develop the fair value estimates and controls over the completeness and accuracy of the underlying data used in the valuation.

To test the estimated fair value of the Company’s reporting units evaluated for impairment using a quantitative assessment within the IT&S segment, we performed audit procedures that included, among others, assessing methodologies and testing the significant assumptions discussed above and the completeness and accuracy of the underlying data used by the Company in its analysis.

We also involved our valuation specialists to review certain significant assumptions.

We compared the significant assumptions used by management to current industry and economic trends.

We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the reporting units that would result from changes in the assumptions.

We reconciled the fair value of the reporting units in the IT&S segment to their carrying value and tested the Company’s determination of the assets and liabilities used within the reporting units that are the basis for the carrying value.

In addition, we tested management’s reconciliation of the fair value of all the reporting units to the market capitalization of the Company and assessed the adequacy of the Company’s goodwill valuation disclosures.

the Matter As described in Note 5 to the consolidated financial statements, during the year ended August 31, 2025, the Company completed the acquisition of DTA The Smart Move, S.A.

(“DTA”) for an initial purchase price of $26.7 million plus a potential earn-out of 12 million euro.

The potential earn-out is to be paid at the end of the third year following the acquisition and is tied to the achievement of certain financial objectives.

The Company’s accounting for this acquisition included determining the fair value of the potential earn-out payment and intangible assets acquired, which primarily included developed technology.

Auditing the Company's accounting for its acquisition of DTA was complex due to the significant estimation uncertainty in the Company’s determination of the fair value of the potential earn-out of 2.3 million euro and intangible assets of $15.0 million, which principally consisted of developed technology.

The significant estimation uncertainty of the potential earn-out and developed technology intangible were primarily due to the sensitivity of the respective fair values to underlying assumptions about the acquired business’s projected achievement of certain financial objectives.

The Company used the Black-Scholes model to determine the fair value of the potential earn-out payment.

The significant assumptions used to estimate the value of the potential earn-out included the forecasted gross profit and the discount rate.

The Company used the relief from royalty rate method to value the developed technology intangible.

The significant assumptions used to estimate the value of the developed technology intangible included the survivor curve for attrition of existing technology, revenue growth, royalty charges and the discount rate.

These significant assumptions are forward looking and could be affected by future economic and market conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s accounting for acquisitions.

For example, our tests included controls over the estimation process supporting the recognition and measurement of the potential earn-out and developed technology intangible.

We also tested management’s review of the valuation models and significant assumptions used in the valuations.

To test the estimated fair value of the potential earn-out and developed technology intangible, we performed audit procedures that included, among others, evaluating the Company's selection of the valuation methodology, evaluating the methods and significant assumptions used by management, and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions and estimates.

We involved our valuation professionals with specialized skills and knowledge to assist with our evaluation of the methodology used by the Company and significant assumptions included in the fair value estimates and we evaluated the reasonableness of management’s forecasts of future cash flows by comparing the projections to historical results and certain peer companies.

/s/ Ernst & Young LLP

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Opinion on Internal Control Over Financial Reporting

We have audited Enerpac Tool Group Corp.

’ s internal control over financial reporting as of August 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

We have audited Enerpac Tool Group Corp.’s internal control over financial reporting as of August 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Enerpac Tool Group Corp.

(the Company) maintained, in all material respects, effective internal control over financial reporting as of August 31, 2025, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of August 31, 2024 and 2023, the related consolidated statements of earnings, comprehensive income (loss), shareholders’ equity and cash flows for each of the three years in the period ended August 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) and our report dated October 21, 2024 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of August 31, 2025 and 2024, the related consolidated statements of earnings, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended August 31, 2025, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) and our report dated October 17, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

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ENERPAC TOOL GROUP CORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

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2025 2024 2023

Net income $ 85,749 $ 46,561 $ 15,686

Other comprehensive income (loss), net of tax

Net earnings $ 92,749 $ 85,749 $ 46,561

Other comprehensive income, net of tax

Foreign currency translation adjustments 10,154 3,053 12,887

Cash flow hedges 552 ( 375 ) —

Pension and other postretirement benefit plans 2,096 1,207 1,239

Total other comprehensive income (loss), net of tax 4,812 13,751 ( 41,977 )

Comprehensive income (loss) $ 90,561 $ 60,312 $ ( 26,291 )

Cash flow hedges 14 552 ( 375 )

Total other comprehensive income, net of tax 12,264 4,812 13,751

Comprehensive income $ 105,013 $ 90,561 $ 60,312

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

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Current liabilities

Current maturities of long-term debt $ 7,500 $ 5,000

Trade accounts payable 42,944 43,368

Accrued compensation and benefits 28,108 25,856

Current maturities of long-term debt 5,000 3,750

Income taxes payable 5,425 5,321

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Additional paid-in capital 243,137 235,660

Treasury stock, at cost, 0 and 28,772,715 shares, respectively — ( 800,506 )

Retained earnings 284,102 261,870

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Net earnings $ 92,749 $ 85,749 $ 46,561

Net earnings (loss) from discontinued operations 3,542 ( 7,088 ) ( 3,905 )

Earnings from discontinued operations, net of income taxes — 3,542 ( 7,088 )

Net earnings from continuing operations 92,749 82,207 53,649

Adjustments to reconcile net earnings from continuing operations to net cash provided by operating activities - continuing operations:

Impairment & divestiture charges (benefit) 147 ( 6,155 ) 2,413

Impairment & divestiture charges — 147 ( 6,155 )

Depreciation and amortization 15,674 13,275 16,313

Stock-based compensation expense 13,016 10,931 8,574

Provision (benefit) for deferred income taxes 435 460 ( 5,291 )

Deferred income taxes ( 186 ) 435 460

Amortization of debt issuance costs 586 586 902

Provision for bad debts 949 327 803

Other non-cash charges (benefits) 108 1,569 ( 344 )

Other non-cash expenses 1,111 108 1,569

Changes in components of working capital and other, excluding acquisitions and divestitures:

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Capital expenditures ( 19,340 ) ( 11,411 ) ( 9,400 )

Cash paid for business acquisitions, net of cash acquired ( 26,661 ) — —

Proceeds from sale of property, plant and equipment — — 685

Working capital adjustment from the sale of business ( 1,133 ) — —

Working capital adjustment from sale of business assets — ( 1,133 ) —

Purchase of business assets — ( 1,402 ) —

Proceeds from sale of business, net of transaction costs — — 20,057

Cash (used in) provided by investing activities - continuing operations ( 13,946 ) 11,342 ( 7,241 )

Cash (used in) provided by investing activities ( 13,946 ) 11,342 ( 7,241 )

Cash (used in) investing activities ( 46,001 ) ( 13,946 ) 11,342

Financing Activities

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Payment for redemption of revolver — — ( 200,000 )

Swingline (repayments) borrowings, net — ( 4,000 ) 4,000

Swingline (repayments), net — — ( 4,000 )

Payment of debt issuance costs — — ( 2,486 )

Purchase of treasury shares ( 68,742 ) ( 38,354 ) ( 57,662 )

Stock options, taxes paid related to the net share settlement of equity awards & other 4,016 ( 1,458 ) ( 3,681 )

Stock options, taxes paid related to the net share settlement of equity awards and other ( 5,548 ) 4,016 ( 1,458 )

Payment of cash dividend ( 2,167 ) ( 2,178 ) ( 2,274 )

Cash used in financing activities - continuing operations ( 56,266 ) ( 53,130 ) ( 52,202 )

Cash used in financing activities ( 81,457 ) ( 56,266 ) ( 53,130 )

Effect of exchange rate changes on cash 638 1,572 ( 2,099 )

Net increase (decrease) from cash and cash equivalents 12,679 33,716 ( 19,653 )

Net (decrease) increase from cash and cash equivalents ( 15,536 ) 12,679 33,716

Cash and cash equivalents - beginning of period 167,094 154,415 120,699

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Cash dividend ($0.04 per share) — — — — ( 2,200 ) — — — ( 2,200 )

Treasury stock repurchases — — — ( 75,112 ) — — — — ( 75,112 )

Stock based compensation expense — — 8,699 — — — — — 8,699

Stock option exercises 43 8 965 — — — — — 973

Tax effect related to net share settlement of equity awards — — ( 2,624 ) — — — — — ( 2,624 )

Stock issued to, acquired for and distributed from rabbi trust 39 9 309 — — — ( 275 ) 275 318

Treasury stock repurchased — — — ( 57,662 ) — — — — ( 57,662 )

Balance at August 31, 2023 83,761 16,752 220,472 ( 800,506 ) 1,011,112 ( 121,210 ) ( 3,484 ) 3,484 326,620

Net earnings — — — — 85,749 — — — 85,749

Other comprehensive income, net of tax — — — — — 13,751 — — 13,751

Other comprehensive loss, net of tax — — — — — 4,812 — — 4,812

Stock contribution to employee benefit plans and other 7 2 227 — — — — — 229

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Cash dividend ($0.04 per share) — — — ( 2,148 ) — — — ( 2,148 )

Treasury stock repurchases — — — ( 57,662 ) — — — — ( 57,662 )

Stock based compensation expense — — 10,931 — — — — — 10,931

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Stock issued to, acquired for and distributed from rabbi trust 30 7 348 — — — ( 293 ) 293 355

Treasury stock repurchased — — — ( 38,354 ) — — — — ( 38,354 )

Treasury stock retired ( 30,082 ) ( 6,017 ) — 838,860 ( 832,843 ) — — — —

Balance at August 31, 2024 54,235 10,847 235,660 — 261,870 ( 116,398 ) ( 3,777 ) 3,777 391,979

Net earnings — — — — 92,749 — — — 92,749

Other comprehensive income, net of tax — — — — — 4,812 — — 4,812

Other comprehensive loss, net of tax — — — — — 12,264 — — 12,264

Stock contribution to employee benefit plans and other 10 2 606 — — — — — 608

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Stock issued to, acquired for and distributed from rabbi trust 17 3 87 — — — 235 ( 235 ) 90

Treasury stock repurchases — — — ( 38,354 ) — — — — ( 38,354 )

Treasury stock retired ( 30,082 ) ( 6,017 ) — 838,860 ( 832,843 ) — — — —

Treasury stock repurchased and retired ( 1,699 ) ( 340 ) — — ( 68,402 ) — — — ( 68,742 )

Balance at August 31, 2025 52,946 $ 10,589 $ 243,137 $ — $ 284,102 $ ( 104,134 ) $ ( 3,542 ) $ 3,542 $ 433,694

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Reference to fiscal years, such as "fiscal 2025," are to the fiscal year ending on August 31 of the specified year.

On October 31, 2019, as part of our overall strategy to become a pure-play industrial tools and services company, the Company completed the sale of the businesses comprising its former Engineered Components & Systems ("EC&S") segment.

This divestiture represented a strategic shift in our operations, and accordingly the results of the former EC&S segment through the date of divestiture and subsequent impacts to the financial results from retained liabilities are recorded in "Earnings (loss) from discontinued operations, net of income taxes" within the Consolidated Statements of Earnings.

On July 11, 2023, the Company completed the sale of the Cortland Industrial business, which had been included in the Other operating segment.

Cash Equivalents:

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If the LIFO method were not used, inventory balances would be higher than reported amounts in the consolidated balance sheets by $ 18.1 million and $ 17.8 million at August 31, 2025 and 2024, respectively.

During the fiscal year ended August 31, 2025, the Company experienced a liquidation of LIFO inventory layers, which resulted in a decrease in cost of goods sold and a corresponding increase in pre-tax income of approximately $ 3.7 million.

This increase in income is attributable to the liquidation of inventory carried at lower historical costs.

The nature of the Company’s products is such that they generally have a very short production cycle.

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Operating leases are recorded as operating lease right-of-use (“ROU”) assets in “Other long-term assets” and operating lease liabilities in “Other current liabilities” and “Other long-term liabilities” on the Consolidated Balance Sheets.

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

All leases greater than 12 months result in recognition of a ROU asset and a liability at the lease commencement date and are recorded at the present value of the future minimum lease payments over the lease term.

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ROU assets at the date of commencement are equal to the amount of the initial lease liability, the initial direct costs incurred by the Company and any prepaid lease payments less any incentives received.

Lease expense for operating leases is recognized on a straight-line basis over the lease term or remaining useful life.

Lease expense for operating leases is recognized on a

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

straight-line basis over the lease term or remaining useful life.

As most of our leases do not provide the information required to determine the implicit rate, we utilize a consolidated group incremental borrowing rate for all leases as the Company has centralized treasury operations.

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The Company’s goodwill is tested for impairment annually during the fourth quarter, or more frequently if events or changes in circumstances indicate that goodwill might be impaired.

The Company performs impairment reviews for its reporting units using a fair value method based on management’s judgments and assumptions.

In conducting the annual impairment test for goodwill, the Company first assesses qualitative factors to determine whether it is more likely than not (greater than 50% likelihood) the fair value of any reporting unit is less than its carrying amount.

If a qualitative assessment determines an impairment is more likely than not, we are required to perform a quantitative impairment test.

Otherwise, no further analysis is required.

Alternatively, we may elect to proceed directly to the quantitative impairment test.

When a quantitative test is deemed necessary, the Company estimates fair value for its reporting units using a fair value method based on management’s judgments and assumptions.

In estimating the fair value, the Company utilizes a discounted cash flow model, which is dependent on a number of assumptions, most significantly forecasted revenues and operating profit margins, and the weighted average cost of capital, or a market value approach if appropriate information is available as of the goodwill impairment assessment date.

The estimated fair value of the reporting unit is compared to the carrying amount of the reporting unit, including goodwill.

If the carrying value of the reporting unit exceeds its fair value, an impairment loss is recorded and should not exceed the total amount of the goodwill allocated to the reporting unit.

If the carrying value of the reporting unit exceeds its fair value, an impairment loss is recorded and should not exceed the total amount of goodwill allocated to the reporting unit.

Indefinite-lived intangible assets are also subject to an annual impairment test.

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Warranty payments and costs incurred ( 1,056 ) ( 699 )

Warranty activity for divested businesses — ( 10 )

Warranty activity for acquired businesses 381 —

Impact of changes in foreign currency rates 58 6

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The Company recognizes revenue when it satisfies a performance obligation in a contract by transferring control of a distinct good or service to a customer.

A contract’s transaction price is allocated to each distinct performance obligation and revenue is measured based on the consideration that the Company expects to be entitled to in exchange for the goods or services transferred.

When contracts include multiple products or services to be delivered to the customer, the consideration for each element is generally allocated on the standalone transaction prices of the separate performance obligations, using the adjusted market assessment approach.

Under normal circumstances, the Company invoices the customer once transfer of control has occurred and has a right to payment.

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The Company commits to one-time or on-going trade discounts and promotions with customers that require the Company to estimate and accrue the ultimate costs of such programs.

The Company generally does not require collateral or

The Company generally does not require collateral or other security for receivables and provides for an allowance for credit losses based on historical experience and a review of its existing receivables.

Accounts receivable are stated net of an allowance for credit losses of $ 3.8 million and $ 15.9 million at August 31, 2025 and 2024, respectively.

During fiscal 2025 the Company wrote off approximately$ 12.9 million in credit loss allowances related to charges that were incurred prior to fiscal 2023.

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

other security for receivables and provides for an allowance for credit losses based on historical experience and a review of its existing receivables.

Accounts receivable are stated net of an allowance for credit losses of $ 15.9 million and $ 16.8 million at August 31, 2024 and 2023, respectively.

Taxes Collected:

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Financing costs represent interest expense, financing fees and amortization of debt issuance costs, net of interest income.

Interest income was $ 2.5 million, $ 2.6 million and $ 1.3 million for fiscal 2024, 2023 and 2022, respectively.

Interest income wa s $ 2.3 million, $ 2.5 million and $ 2.6 million for fiscal 2025, 2024 and 2023, respectively.

Income Taxes:

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The Company manages the profitability of its product and service & rental categories on a combined basis given the complexity of the business model.

This model includes providing integrated product and service solutions resulting in facilities that generate revenues from both product and service & rental categories, which also have indirect and facility overhead costs

As such, judgment and estimates are required to disaggregate product and service & rental cost of sales including allocating indirect and facility overhead costs between cost of product sales and the cost of service & rental sales.

Changes in these judgments and estimates could materially change the allocation of the indirect and facility overhead

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

included in cost of sales.

Changes in these judgments and estimates could materially change the allocation of the indirect and facility overhead costs to the different sales categories and the resulting ratio of cost of sales to net sales by category.

costs to the different sales categories and the resulting ratio of cost of sales to net sales by category.

Because the sales mix heavily favors the product category, a change in the mix of cost of sales between the sales categories would have a more significant impact on the ratio of cost of sales to net sales for the service & rental category.

Recently Issued Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2023-09 “Income Taxes (Topic 470):

Improvements to Income Tax Disclosures” (“ASU 2023-09”), which establishes new income tax disclosures to consistently categorize and provide greater disaggregation of information in the rate reconciliation, including dollar value and percentage impacts of each component of the reconciliation, as well as further disaggregates income taxes paid.

This guidance is effective for fiscal years beginning after December 15, 2024.

The Company is evaluating the impact of the adoption of ASU 2023-09 on the consolidated financial statements.

In November 2024, the FASB issued Accounting Standards Update 2024-03 “Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures:

Disaggregation of Income Statement Expenses” (“ASU 2024-03”), which is intended to improve disclosures about a public business entity's expenses, primarily through additional disaggregation of income statement expenses.

ASU 2024-3 is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027.

The Company is evaluating the impact of the adoption of ASU 2024-03 on the consolidated financial statements.

Revenue from Contracts with Customers

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Total $ 616,899 $ 589,510 $ 598,204

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Contract Balances

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The Company maintains an allowance for credit losses for expected losses as a result of customers’ inability to make required payments.

Management evaluates the aging of customer receivable balances, the financial condition of its customers, historical trends and the time outstanding of specific balances to estimate the amount of

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

receivables that will not be collected in the future and records the appropriate provision.

Management evaluates the aging of customer receivable balances, the financial condition of its customers, historical trends and the time outstanding of specific balances to estimate the amount of receivables that will not be collected in the future and records the appropriate provision.

The allowance for credit losses was $ 3.8 million and $ 15.9 million at August 31, 2025 and 2024, respectively.

As indicated in the "Concentration of Credit Risk" section below, as of August 31, 2024 and 2023, the Company was exposed to a concentration of credit risk with an agent as a result of its continued payment delinquency.

During the year ended August 31, 2022, the Company recorded through bad debt expense (included in "Selling, general and administrative expenses" ("SG&A expenses") in the Condensed Consolidated Statements of Earnings) a reserve of $ 13.2 million based on the consideration of the factors listed below, which fully reserves for the outstanding account receivable balance for this agent.

The allowance for credit losses for this particular agent remained unchanged as of August 31, 2024 represents management's best estimate of the amount probable of collection and considers various factors with respect to this matter, including, but not limited to, (i) the lack of payment by the agent 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 customer;

(iii) the status of ongoing negotiations with the agent to secure payments;

(iv) legal recourse available to secure payment;

and (v) the agent is currently in bankruptcy proceedings.

Actual collections from the agent may differ from the Company's estimate.

Concentration of Credit Risk:

The Company sells products and services through distributors and agents.

In certain jurisdictions, those third parties represent a significant portion of our sales in their respective country which can pose a concentration of credit risk if these larger distributors or agents are not timely in their payments.

As of August 31, 2024 the Company was exposed to a concentration of credit risk as a result of the payment delinquency of one of our agents whose accounts receivable represent 10.9 % of the Company's outstanding accounts receivable.

As of August 31, 2024, the Company has fully reserved for the amounts due from this agent.

Contract Assets:

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The Company does not disclose the value of unperformed obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which it recognizes revenue at the amount to which it has the right to invoice for services performed.

ASCEND Transformation Program

In March 2022, the Company announced the start of its ASCEND transformation program, initially estimating an incremental $ 40 to $ 50 million of annual operating profit once fully implemented.

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.

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

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

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.

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.

In March 2023, the investment range increased from the initial $ 60 to $ 65 million, to $ 70 to $ 75 million inclusive of the $ 10 to $ 15 million of the previously announced restructuring over the life of the program.

ASCEND Transformation Program

In March 2022, the Company announced the start of its ASCEND transformation program.

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.

The following summarizes ASCEND transformation charges (in thousands):

Year-Ended August 31,

2024 2023 2022 Program to Date

2024 2023 Program to Completion

ASCEND Expense recorded in Cost of products sold $ 1,018 $ 924 $ 1,948

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Total ASCEND Transformation Charges $ 14,890 $ 43,138 $ 74,694

The ASCEND program was completed as of August 31, 2024, with total program costs of $ 74.7 million, of which $ 18.6 million was restructuring charges.

The restructuring charges incurred were predominately severance and other employee-related costs (see Note 4, "Restructuring Charges" ).

Restructuring Charges

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Liabilities for severance are generally to be paid within twelve months, while future lease payments related to facilities vacated as a result of restructuring are to be paid over the underlying remaining lease terms.

During fiscal 2019, the Company announced a restructuring plan focused on (i) the integration of the Enerpac and Hydratight businesses (IT&S segment), (ii) the strategic exit of certain commodity-type services in our North America Services operations (IT&S segment) and (iii) driving efficiencies within the overall corporate structure, with further expansion in fiscal 2020 and fiscal 2022.

The Company recorded $ 5.2 million of charges for the year ended August 31, 2022 in order to further simplify and streamline the organizational structure.

The total cumulative charges for the 2019 plan, which ended in the third quarter of fiscal 2022, were $ 18.0 million.

On June 27, 2022, the Company approved a restructuring plan in connection with the initiatives identified as part of the ASCEND transformation program (see Note 3, “ASCEND Transformation Program” ) to drive greater efficiency and productivity in global selling, general and administrative resources.

The total costs of this plan were then estimated at $ 6 to $ 10 million , constituting predominately severance and other employee-related costs to be incurred as cash expenditures and impacting both IT&S and Corporate.

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.

For the year ended August 31, 2024, 2023 and 2022, the Company recorded $ 7.8 million, $ 7.7 million and $ 3.1 million, respectively, of restructuring charges associated with the ASCEND transformation program.

The total cumulative charges for the ASCEND transformation program, which ended in the fourth quarter of fiscal 2024, that related to restructuring were $ 18.6 million.

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

The following summarizes restructuring reserve activity (which for the year ended August 31, 2023 excludes $ 0.6 million of charges associated with ASCEND transformation plan for Corporate associated with the accelerated vesting of equity awards which has no impact on the restructuring reserve) (in thousands):

The costs of this plan were predominately severance and other employee-related costs incurred as cash expenditures and impacting both IT&S and Corporate.

For the years ended August 31, 2024 and 2023, the Company recorded $ 7.8 million and $ 7.7 million, respectively, of restructuring charges associated with the ASCEND transformation program, inclusive of the Other Segment.

No restructuring charges associated with the ASCEND transformation program were recorded for the year ended August 31, 2025 as the ASCEND program ended at August 31, 2024, with a total restructuring charge of $ 18.6 million.

The following summarizes ASCEND restructuring reserve activity for the IT&S segment and Corporate (in thousands):

Year Ended August 31, 2025

1 unchanged sentence

Balance as of August 31, 2024 $ 3,527 $ 197

Cash payments ( 3,510 ) ( 197 )

Impact of changes in foreign currency rates ( 17 ) —

Balance as of August 31, 2025 $ — $ —

Year Ended August 31, 2024

IT&S Corporate

Balance as of August 31, 2023 $ 2,238 $ 74

Restructuring charges 7,244 552

3 unchanged sentences

Balance as of August 31, 2024 $ 3,527 $ 197

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

During the third quarter of fiscal 2025, in light of the soft market conditions and in an effort to continue increasing the efficiency of its selling, general and administrative spend, the Company incurred restructuring costs of $ 5.9 million , of which approximately three-quarters was related to personnel actions and the remainder were charges associated with the Company's former headquarters location.

Liabilities for severance are generally to be paid within twelve months.

The following summarizes Fiscal 2025 Restructuring Plan restructuring reserve activity for the IT&S segment and Corporate (in thousands):

Year Ended August 31, 2025

2019 Plan ASCEND Plan

IT&S Corporate IT&S Corporate

IT&S Corporate

Balance as of August 31, 2024 $ — $ —

4 unchanged sentences

Balance as of August 31, 2025 $ 1,706 $ 1,379

Total restructuring charges (inclusive of the Other operating segment) for the years ended August 31, 2024 and 2023 were $ 7.8 million and $ 7.7 million, respectively, which included approximately $ 0.4 million and $ 0.6 million of charges being reported in the Consolidated Statements of Operations in "Cost of products sold," with the balance of the charges reported on "Restructuring charges." Total restructuring charges (inclusive of the Other operating segment) being reported in "Restructuring charges " were $ 8.1 million for the year ended August 31, 2022.

On September 4, 2024, the Company acquired 100% of the stock of DTA The Smart Move, S.A.

("DTA"), a global leader in the industrial heavy loads transportation industry, designing and manufacturing mobile robotic solutions.

The acquisition provides a complement to Enerpac's Heavy Lifting Technology product line and combines the Company's existing focus on vertical lift with DTA's specialization in horizontal movement enabling the Company to provide more comprehensive solutions for customers.

The Company acquired all of the assets and assumed certain liabilities of DTA for an initial purchase price of $ 26.7 million plus potential earn-out of € 12.0 million to be paid at the end of the third year following the acquisition that is contingent upon the achievement of certain financial objectives with a maximum total purchase price of € 36.0 million.

The acquisition was funded with both cash on hand and borrowings from our existing credit facility .

T he Company recorded a liability of € 2.3 million related to the potential earn-out payment and recognized $ 15.0 million of intangible assets made up of amortizable assets including $ 1.7 million in tradenames amortizable over three years , $ 3.6 million in customer relationship amortizable over fourteen years and $ 9.8 million in developed technology over seven years .

Management has estimated the fair value of the earn-out liability to be € 2.5 million as of August 31, 2025.

The Company has finalized the fair value of assets and liabilities acquired as of August 31, 2025.

There were no material adjustments to the preliminary fair value allocation upon finalization.

The excess of the acquisition purchase price over the fair value assigned to the assets acquired and liabilities assumed was recorded to goodwill.

The value of the assets acquired and liabilities assumed as of the acquisition date were as follows (in thousands):

Current assets $ 6,299

Property, plant and equipment 2,841

Intangible assets 14,977

Goodwill 14,684

Long-term assets 400

Total assets acquired 39,201

Current liabilities ( 6,977 )

Long-term liabilities ( 5,563 )

Net assets acquired $ 26,661

Discontinued Operations and Other Divestiture Activities

1 unchanged sentence

On October 31, 2019 , as part of our overall strategy to become a pure-play industrial tools and services company, the Company completed the sale of the businesses comprising its former EC&S segment.

This divestiture was considered part of our strategic shift to become a pure-play industrial tools and services company, and therefore, the results of operations are recorded as a component of "Earnings (loss) from discontinued operations, net of income taxes" in the Condensed Consolidated Statements of Earnings for all periods presented.

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Statements of Earnings for all periods presented.

All discontinued operations activity included within the Condensed Consolidated Statements of Earnings and the Condensed Consolidated Statements of Cash Flows for the periods presented relate to impacts from certain retained liabilities.

1 unchanged sentence

Year Ended August 31,

2024 2023 2022

Selling, general and administrative (benefit) expenses $ ( 6,054 ) $ 10,069

Impairment & divestiture benefit — ( 1,530 ) —

Impairment & divestiture charges — ( 1,530 )

Operating income (loss) 6,054 ( 8,539 )

Other income, net — 372

Earnings (loss) before income tax benefit 6,054 ( 8,911 ) ( 4,842 )

Earnings (loss) before income tax expense 6,054 ( 8,911 )

Income tax expense (benefit) 2,512 ( 1,823 )

2 unchanged sentences

On July 11, 2023 , the Company completed the sale of the Cortland Industrial business, which had been included in the Other operating segment, for net cash proceeds of $ 20.1 million.

In connection with the completion of the sale, the Company recorded a net gain of $ 6.0 million, inclusive of $ 0.1 million of purchase price from the customary finalization of working

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

capital negotiations in the first quarter of fiscal 2024.

The historical results of the Cortland Industrial business (which had net sales of $ 22.7 million, and $ 26.2 million for the year ended August 31, 2023 and 2022, respectively) are not material to the consolidated financial results.

In connection with the completion of the sale, the Company recorded a net gain of $ 6.0 million, inclusive of $ 0.1 million of purchase price from the customary finalization of working capital negotiations in the first quarter of fiscal 2024.

The historical results of the Cortland Industrial business (which had net sales of $ 22.7 million for the year ended August 31, 2023 ) are not material to the consolidated financial results.

Goodwill, Intangible Assets and Long-Lived Assets

5 unchanged sentences

Balance as of August 31, 2024 258,388 11,209 269,597

DTA Acquisition 14,684 — 14,684

Impact of changes in foreign currency rates 5,506 — 5,506

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Patents 12 11,193 9,796 1,397 9,916 9,408 508

Developed Technology 7 10,283 1,469 8,814 — — —

Trademarks and tradenames 7 7,291 3,100 4,191 2,764 2,308 456

3 unchanged sentences

The Company estimates amortization expense for future years to be:

$ 2.9 million in fiscal 2025, $ 1.9 million in fiscal 2026, $ 1.9 million in fiscal 2027, $ 1.7 million in fiscal 2028, $ 1.6 million in fiscal 2029 and $ 1.0 million in aggregate thereafter.

$ 5.8 million in fiscal 2026, $ 5.7 million in fiscal 2027, $ 3.6 million in fiscal 2028, $ 3.5 million in fiscal 2029, $ 2.6 million in fiscal 2030, $2.0 million in fiscal 2031 and $ 2.3 million in aggregate thereafter.

T he future amortization expense amounts represent estimates and may be impacted by future acquisitions, divestitures or changes in foreign currency exchange rates, among other causes.

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

In conjunction with our annual goodwill impairment assessment , the Company did not record any charges in fiscal 2025 or 2024.

1 unchanged sentence

Senior Credit Facility

Revolver — 16,000

Term Loan 190,000 195,000

3 unchanged sentences

Total long-term debt, less current maturities $ 182,168 $ 189,503

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Senior Credit Facility

17 unchanged sentences

Foreign currency exchange contracts and interest rate swaps are recorded at fair value.

The fair value of the Company's foreign currency exchange contracts was a net liability of $ 0.3 million and l ess than $ 0.1 million at August 31, 2024 and 2023, respectively .

The fair value of the Company's interest rate swap and net investment hedge was an asset of less than $ 0.1 million and a liability of $ 1.6 million at August 31, 2024 and an asset of $ 0.7 million and a liability of $ 1.2 million at August 31, 2023 (see Note 9, “Derivatives” for further information on the Company's interest rate swap and net investment hedge.) The fair value of all derivative contracts were based on quoted inactive market prices and therefore classified as Level 2 within the valuation hierarchy.

The fair value of the Company's foreign currency exchange contracts was a net asset of less than $ 0.1 million and a net liability of $ 0.3 million at August 31, 2025 and 2024, respectively .

The fair value of the Company's interest rate swap and net investment hedge was an asset of less than $ 0.1 million and a liability of $ 4.7 million at August 31, 2025 and an asset of $ 0.1 million and a liability of $ 1.6 million at August 31, 2024 (see

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Note 10, “Derivatives” for further information on the Company's interest rate swap and net investment hedge.) The fair value of all derivative contracts were based on quoted inactive market prices and therefore classified as Level 2 within the valuation hierarchy.

All derivatives are recognized in the balance sheet at their estimated fair value.

6 unchanged sentences

dollar equivalent notional value of these short duration foreign currenc y exchange contracts was $ 10.3 million and $ 15.6 million at August 31, 2025 and 2024, respectively.

The fair value of outstanding foreign currency

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

exchange contracts was a net liability of $ 0.3 million and less than $ 0.1 million at August 31, 2024 and 2023, respectively .

The fair value of outstanding foreign currency exchange contracts was a net asset of less than $ 0.1 million and net liability of $ 0.3 million at August 31, 2025 and 2024, respectively .

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

1 unchanged sentence

2025 2024 2023

Foreign currency loss (gain) $ 863 $ 945 $ ( 319 )

Foreign currency (gain) loss $ ( 45 ) $ 863 $ 945

During December 2022, the Company entered into an interest rate swap, with a maturity date of November 30, 2025, for the notional amount of $ 60.0 million at a fixed interest rate of 4.022 % to hedge the floating interest rate of the Company's term loan.

2 unchanged sentences

The Company records the fair value of the interest rate swap as an asset or liability on its balance sheet.

The change in the fair value of the interest rate swap, a net loss of $ 0.5 million and net gain of $ 0.5 million for the years ended August 31, 2024 and 2023, respectively , is recorded in other comprehensive income (loss).

The change in the fair value of the interest rate swap, a net gain of less than $ 0.1 million and net loss of $ 0.5 million for the years ended August 31, 2025 and 2024, respectively , is recorded in other comprehensive income (loss).

The Company also uses interest-rate derivatives to hedge portions of our net investments in non-U.S.

2 unchanged sentences

dollar functional currency.

As of August 31, 2024 , the notional amount of cross-currency swaps designated as net investment hedges was $ 30.5 million.

The change in the fair value of the net investment hedge, a net loss of $ 0.3 million and $ 0.9 million for the years ended August 31, 2024 and 2023, respectively , is recorded in other comprehensive income (loss).

During December 2022, the Company entered into a cross-currency swap designated as a net investment hedge with a notional amount of $ 30.5 million.

On October 28, 2024, the Company entered into an incremental cross-currency swap designated as a net investment hedge with a notional amount of $ 14.1 million.

The change in the fair value of the net investment hedges, a net loss of $ 3.6 million and $ 0.3 million for the years ended August 31, 2025 and 2024, respectively , is recorded in other comprehensive income (loss).

As of August 31, 2025, the Company ha d operating leases for real estate, vehicles, manufacturing equipment, IT equipment and office equipment.

5 unchanged sentences

In addition, our leases generally do not include material residual value guarantees or material restrictive covenants.

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

The components of lease costs for the year ended August 31, 2025, 2024 and 2023 were as follows (in thousands):

11 unchanged sentences

Operating leases 6,183 3,075 1,654

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Supplemental balance sheet information related to leases at August 31, 2025 and 2024 were as follows (in thousands):

14 unchanged sentences

Present value of net minimum lease payments $ 38,079

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Employee Benefit Plans

7 unchanged sentences

Interest cost 1,565 1,716

Actuarial (gain) loss 1,273 ( 2,337 )

Actuarial (loss) gain ( 872 ) 1,273

Benefits paid ( 3,368 ) ( 3,337 )

7 unchanged sentences

Funded status of the plans (underfunded) $ ( 2,228 ) $ ( 4,402 )

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

The following table provides detail on the Company’s domestic net periodic benefit expense (in thousands):

9 unchanged sentences

pension plan obligations as of August 31 and weighted-average assumptions used to determine net periodic benefit cost for the years ended August 31 are as follows:

Year ended August 31,

2025 2024 2023

6 unchanged sentences

As such, the plan assets are invested to maintain funded ratios over the long term, while managing the risk that funded ratios fall meaningfully below 100%.

In fiscal 2024 and 2023, the plan assets were invested in a mix of 50 % duration-matched fixed income securities and 50 % equity securities.

In fiscal 2025 and fiscal 2024, the plan assets were invested in a mix of 50 % duration-matched fixed income securities and 50 % equity securities.

Cash balances are maintained at levels adequate to meet near-term plan expenses and benefit payments.

Investment risk is measured and monitored on an ongoing basis.

At August 31, 2024, the Company’s overall expected long-term rate of return for assets in U.S.

At August 31, 2025, the Company’s overall expected long-

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

term rate of return for assets in U.S.

pension plans was 6.35 %.

2 unchanged sentences

pension plan investment allocations by asset category were as follows (dollars in thousands):

Year Ended August 31,

2025 % 2024 %

12 unchanged sentences

Projected benefit payments from plan assets to participants in the Company’s U.S.

pension plans are $ 3.2 million for fiscal 2025, $ 3.1 million per year for fiscal 2026 and 2027, $ 3.0 million for fiscal 2028, $ 2.9 million for fiscal 2029 and $ 12.9 million in aggregate for the following five years.

pension plans are $ 3.0 million for fiscal 2026, $ 3.1 million for fiscal 2027 , $ 3.0 million for fiscal 2028 , $ 2.9 million for fiscal 2029, $ 2.8 million for fiscal 2030 and $ 12.1 million in aggregate for the following five years.

The Company plans to make a contribution of $ 0.8 million to the U.S.

1 unchanged sentence

The Company did not make a contribution to the plan in fiscal 2025 or fiscal 2024.

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Foreign Defined Benefit Pension Plans

8 unchanged sentences

Benefits paid ( 294 ) ( 261 )

Settlements — ( 213 )

Currency impact 400 199

8 unchanged sentences

Funded status of the plans (underfunded) $ ( 1,717 ) $ ( 2,014 )

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

The following table provides detail on the Company’s foreign net periodic benefit expense (in thousands):

12 unchanged sentences

During fiscal 2026, the Company does not anticipate contributing to these pension plans.

Projected benefit payments to participants in the these f oreign plans are $ 0.3 million for each of fiscal 2025, 2026, and 2027, $ 0.4 million for each of fiscal 2028 and 2029 and $ 2.3 million in aggregate for the five years thereafter.

Projected benefit payments to participants in these f oreign plans are $ 0.3 million for each of fiscal 2026 and fiscal 2027;

and $ 0.4 million for each of fiscal 2028, fiscal 2029 and fiscal 2030 and $ 2.6 million in aggregate for the five years thereafter.

Other Postretirement Health Benefit Plans

2 unchanged sentences

These obligations are determined utilizing assumptions consistent with those used for our U.S.

pension plans and a health care cost trend rate of 6.8 %, trending downward to 5.0 % by the year 2026, and remaining level thereafter.

Net periodic benefit costs for other postretirement benefits was income of $ 0.04 million in the year ended August 31, 2024, and $ 0.1 million for each of the fiscal years ended August 31, 2023 and 2022.

pension plans and a health care cost trend rate of 6.5 %, trending downward to 5.0 % by fiscal 2026, and remaining level thereafter.

Net periodic benefit costs for other postretirement benefits was income of less than $ 0.1 million for each of the years ended August 31, 2025, 2024 and 2023.

Benefit payments from the plan are funded through participant contributions and Company contributions.

Benefit payments are projected to be $ 0.2 million in fiscal 2026.

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Defined Contribution Benefit Plans

7 unchanged sentences

In addition, the Company may make an annual, discretionary contribution of up to 3 % of employees' eligible pay to employees employed as of the end of the plan year.

The discretionary contrib ution has a three -year vesting period.

The discretionary contribution has a three -year vesting period.

The Company elected not to provide a discretionary contribution for the year ended August 31, 2025.

The Company also maintains a Restoration Plan that allows eligible highly compensated employees (as defined by the Internal Revenue Code) to receive a core contribution as if no IRS limits were in place.

Compan y contributions to the Restoration Plan are made in the form of its Class A common stock and contributed into each eligible participant’s deferred compensation plan.

The Company has not contributed in fiscal 2024, 2023 or fiscal 2022.

Expense recognized related to the 401(k) plan totaled $ 2.1 million for each of the fiscal years ended August 31, 2024 and 2023, and $ 2.2 million for the fiscal year ended August 31, 2022 .

Expense recognized related to the 401(k) plan totaled $ 2.0 million for each of fiscal 2025 and 2024, and $ 2.1 million for the fiscal 2023 .

In addition to the 401(k) plan, the Company sponsors a non-qualified supplemental executive retirement plan (“the SERP Plan”).

1 unchanged sentence

This unfunded plan had a $ 0.7 million and $ 0.9 million obli gation at August 31, 2025 and 2024, respectively .

Expense recognized for the SERP Plan was $ 0.3 million in fiscal 2024, and $ 0.2 million in each of fiscal 2023 and 2022.

Expense recognized for the SERP Plan was $ 0.2 million in fiscal 2025, and $ 0.2 million in each of fiscal 2024 and fiscal 2023.

Deferred Compensation Plan

5 unchanged sentences

Liabilities of $ 6.6 million and $ 9.3 million are included in the Consolidated Balance Sheets at August 31, 2025 and 2024, respectively, to reflect the unfunded portion of the deferred compensation liability.

The Company recorded expense in "Financing costs, net" of $ 0.9 million, $ 0.9 million and $ 0.7 million for the years ended August 31, 2024, 2023 and 2022, respectively, for the non-funded return on participant deferrals.

The Company recorded expense in "Financing costs, net" of $ 0.6 million, $ 0.9 million and $ 0.9

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

million for fiscal 2025, fiscal 2024 and fiscal 2023, respectively, for the non-funded return on participant deferrals.

Company common stock contributions to fund the plan are held in a rabbi trust, accounted for in a man ner similar to treasury stock and are recorded at cost in “Stock held in trust” within shareholders’ equity on the Consolidated Balance Sheets with the corresponding deferred compensation liability also recorded within shareholders’ equity on the Consolidated Balance Sheets.

7 unchanged sentences

Both domestic and foreign pre-tax earnings from continuing operations are impacted by changes in operating earnings, acquisition and divestiture activities, restructuring charges and the related benefits, growth investments, debt levels and the impact of changes in foreign currency exchange rates.

In fiscal 2024, domestic earnings included non-cash impairment and other divestiture charges of $ 0.1 million.

In fiscal 2023, domestic earnings included non-cash impairment and other divestiture benefits of $ 6.2 million.

In fiscal 2022, domestic and foreign earnings included $ 1.3 million and $ 1.1 million of non-cash impairment and other divestiture charges, respectively.

In fiscal 2025, domestic earnings did not include impairment and other divestiture charges.

In fiscal 2024, domestic earnings included $ 0.1 million o f non-cash impairment and other divestiture charges, and fiscal 2023 results included $ 6.2 million of impairment and divestiture benefits.

Substantially all of the non-cash impairment and other divestiture charges (benefits) did not result in a tax expense (benefit).

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Income tax expense from continuing operations is summarized as follows (in thousands):

11 unchanged sentences

Income tax expense $ 27,980 $ 23,312 $ 15,249

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Income tax expense from continuing operations recognized in the accompanying consolidated statements of earnings differs from the amounts computed by applying the federal income tax rate to earnings from continuing operations before income tax expense.

7 unchanged sentences

Compensation adjustment 0.7 2.0 1.5

Impairment and other divestiture charges — — 1.1

Valuation allowance additions and releases — ( 4.1 ) ( 0.8 )

2 unchanged sentences

Taxable liquidation of subsidiaries — — 0.1

— 0.1 ( 11.4 )

Foreign non-deductible expenses — 0.3 1.7

8 unchanged sentences

earnings, net of foreign tax credits for fiscal 2025, 2024 and 2023, respectively.

(2) During fiscal 2022, the Company generated a net benefit of $ 2.7 million as a result of taxable liquidations of subsidiaries.

(3) During fiscal 2024, the Company generated a $ 0.4 million tax expense related to audits and adjustments as compared to a tax benefit of $ 2.0 million and $ 1.6 million for fiscal 2023 and 2022, respectively.

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(2) During both fiscal 2025 and fiscal 2024, the Company generated a $ 0.4 million tax expense related to audits and adjustments as compared to a tax benefit of $ 2.0 million for fiscal 2023.

Temporary differences and carryforwards that gave rise to deferred tax assets and liabilities include the following items (in thousands):

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(1) The net deferred income tax asset is reflected on the balance sheet in two categories:

an asset of $ 14.7 million and $ 15.7 million for fiscal 2024 and 2023, respectively, is included in "Other long-term assets" and a liability of $ 3.7 million and $ 5.7 million for fiscal 2024 and 2023, respectively, is included in "Deferred income taxes".

an ass et of $ 13.7 million and $ 14.7 million for fiscal 2025 and 2024, respectively, is included in "Other long-term assets" and a liability of $ 6.2 million and $ 3.7 million for fiscal 2025 and 2024, respectively, is included in "Deferred income taxes".

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

The Company has $ 54.3 million and $ 2.5 million of gross state net operating loss and credit carryforwards, respectively, which are available to reduce future state tax liabilities.

27 unchanged sentences

federal, state and foreign income tax examinations by tax authorities in major tax jurisdictions for years prior to fiscal 2013.

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Company believes it is reasonably possible that the total amount of unrecognized tax benefits could decrease by up to $ 1.4 million throughout fiscal 2025.

The Company believes it is reasonably possible that the total amount of unrecognized tax benefits could decrease by up to $ 2.2 million throughout fiscal 2026.

Cash paid for income taxes, net of refunds, totaled $ 26.6 million, $ 23.8 million and $ 2.7 million during the years ended August 31, 2025, 2024 and 2023, respectively.

5 unchanged sentences

If the Company were to issue any of its preferred stock, no dividends could be paid or set apart on shares of common stock, unless paid in common stock, until dividends on all of the issued and outstanding shares of preferred stock had been paid or set apart for payment and provision had been made for any mandatory sinking fund payments.

The Company's Board of Directors approved four separate authorizations (September 2011, March 2014, October 2014 and March 2015) to repurchase up to 7,000,000 shares each of the Company’s outstanding common stock.

The Company suspended the initial share repurchase program in response to the COVID-19 pandemic in the third quarter of fiscal 2020.

In March 2022, the Company's Board of Directors rescinded its prior share repurchase authorization and approved a new share repurchase program authorizing the repurchase of a total of 10,000,000 shares of the Company's outstanding common stock.

The Company repurchased 1,309,466 shares for $ 38.4 million in the year ended August 31, 2024.

As of August 31, 2024, the maximum number of shares that may yet be purchased under the program is 2,717,049 shares.

The Company's Board of Directors has authorized the repurchase of shares of the Company's common stock under publicly announced share repurchase programs.

Since the inception of the initial share repurchase program in fiscal 2012, the Company has repurchased 31,781,381 shares of common stock for $ 907.6 million.

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.

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.

In addition to the initial share retirement, the Company repurchased and retired 240,972 shares during the year-ended August 31, 2024.

In March 2022, the Company's Board of Directors 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 December 2023, the Company's Board of Directors authorized the retirement of the Company's repurchased shares.

The Company repurchased 1,309,466 shares for $ 38.4 million in the year ended August 31, 2024 and 1,699,200 shares for $ 68.7 million in the year ended August 31, 2025.

All shares repurchased have been retired.

At August 31, 2025, the maximum number of shares that may yet be purchased under the program is 1,017,849 shares.

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

On October 10, 2025, the Company's Board of Directors authorized the repurchase of the Company's common stock for up to an aggregate amount of $ 200 million, expiring on October 31, 2029 or earlier as may be determined by the Company's Board of Directors or an authorized committee.

The 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.

Earnings Per Share

3 unchanged sentences

Net earnings from continuing operations $ 92,749 $ 82,207 $ 53,649

Net earnings (loss) from discontinued operations 3,542 ( 7,088 ) ( 3,905 )

Earnings from discontinued operations, net of income taxes — 3,542 ( 7,088 )

Net earnings $ 92,749 $ 85,749 $ 46,561

2 unchanged sentences

Weighted average common shares outstanding - diluted 54,485 54,862 57,117

Earnings per common share from continuing operations:

Earnings per share from continuing operations

Basic $ 1.72 $ 1.51 $ 0.95

Diluted $ 1.70 $ 1.50 $ 0.94

Earnings (loss) per common share from discontinued operations:

Earnings (loss) per share from discontinued operations

Basic $ — $ 0.07 $ ( 0.13 )

Diluted $ — $ 0.06 $ ( 0.12 )

Earnings per common share:

Earnings per share:

Basic $ 1.72 $ 1.58 $ 0.82

3 unchanged sentences

2017 Omnibus Incentive Plan (as amended and restated November 9, 2020) (the “Plan”).

A total of 7,825,000 shares of Class A common stock have been authorized for issuance under the Plan (including 3,500,000 shares that were authorized for issuance at the January 2021 annual meeting) plus shares, if any, that become issuable, pursuant to the terms of the Plan, upon the expiration, cancellation or forfeiture of awards under our previously registered stock plans outstanding at the time the Plan was first approved by the Company's shareholders.

A total of 7,825,000 shares of Class A common stock have been authorized for issuance under the Plan plus shares, if any, that become issuable, pursuant to the terms of the Plan, upon the expiration, cancellation or forfeiture of awards under our previously registered stock plans outstanding at the time the Plan was first approved by the Company's shareholders.

At August 31, 2025, 2,577,263 shares were available for future award grants.

The Plan permits the Company to grant share-based awards, including stock options, restricted stock, restri cted stock units and performance shares (the "Performance Shares") to employees and directors.

Options generally have a maximum term of ten years , an exercise price equal to 100 % of the fair market value of the Company’s common stock at the date of grant and generally vest 50 % after three years and 100 % after five years.

The Company’s restricted stock grants prior to fiscal 2017 generally have similar vesting provisions as options, while grants thereafter generally vest in equal installments over a three-year period.

The Performance Shares include a three -year performance period.

For the awards of Performance Shares granted in the year end ed August 31, 2022 , payout under the awards is based 50 % on Company’s total shareholder return (“TSR”) relative to the S&P 600 SmallCap Industrial metric and 50 % on the Company's three-year average return on invested capital.

For awards of Performance Shares granted in the years ended August 31, 2024 and 2023 , payout under the awards is based 33.3 % on the relative TSR metric, 33.3 % on the Company's adjusted earnings per share and 33.3 % on the Company's three-year average return on invested capital.

The Plan permits the Company to grant share-based awards, including stock options, restricted stock units and performance shares to employees and directors.

Under the Plan, options may have a maximum term of ten years and an exercise price per share no less than 100 % of the fair market value of the Company’s common stock at the date of grant.

No Options have been granted under Plan.

The Company’s restricted stock grants generally vest, subject to continued employment, in equal annual installments over a three -year period.

The awards of performance shares generally include a three -year performance period and vest at the end of the period, subject to continued employment.

The awards of performance shares granted in fiscal 2025, fiscal 2024 and fiscal 2023 generally provide for payout based 33.34 % on the relative total shareholder return metric, 33.33 % on the Company's adjusted earnings per share and 33.33 % on the Company's three-year average return on invested capital.

The p rovisions of share-based awards may vary by individual grant with respect to vesting period, dividend and voting rights, performance conditions and forfeitures.

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A summary of restricted stock units and performance shares activity during fiscal 2025 is as follows:

Shares Weighted-Average Fair Value at Grant Date (Per Share)

Shares Weighted-Average Fair Value

at Grant Date

Outstanding on August 31, 2024 879,865 $ 25.50

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(Per Share) Weighted-Average

Remaining Contractual

Term Aggregate

Intrinsic Value

Outstanding on September 1, 2024 225,849 $ 25.81

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Forfeited ( 24,862 ) 30.85

Expired ( 115,767 ) 36.35

Outstanding on August 31, 2025 126,171 $ 26.42 1.3 $ 2,008,202

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The Company generally records compensation expense over the vesting period for restricted stock unit awards based on the market value of the Company's Class A common stock on the grant dat e and utilized an expected forfeiture rate of 12 % for the years ended August 31, 2025, 2024 and 2023.

The fair value of Performance Shares with market vesting conditions, which includes the Performance Shares awarded in fiscal 2024, 2023 and 2022, is determined utilizing a Monte Carlo simulation model.

As of August 31, 2024, there was $ 9.7 million of total unrecognized compensation cost related to share-based awards, including stock options, restricted stock, restricted stock units and Performance Shares, which will be recognized over a weighted average period of 1.5 years.

The fair value of Performance Shares with market vesting conditions utilize a Monte Carlo simulation model while those with performance vesting conditions have a fair value based on market price on the date of grant with updates made periodically to the amount of expense recognized based on our assessment of the performance condition being met with a range of attainment between 0 % and 200 %.

As of August 31, 2025, there was $ 9.9 million of total unrecognized compensation cost related to share-based awards, including stock options, restricted stock units and Performance Shares, which will be recognized over a weighted average period of 1.7 years.

The total fai r value of share-based awards that vested during the fiscal years ended August 31, 2025 and 2024 was $ 11.8 million and $ 8.3 million, respectively.

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The Other operating segment is included for purposes of reconciliation of the respective balances below to the consolidated financial statements.

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

The Company’s Chief Executive Officer is the Chief Operating Decision Maker (CODM).

The CODM allocates resources and makes operating decisions based on the financial information presented by the Company’s segments.

The measures regularly reviewed by our CODM include segment sales, segment operating profit and segment operating profit margin.

Our CODM uses these financial measures, to evaluate and allocate capital and company resources as critical determinants of segment performance.

In addition, these metrics are used to monitor forecasted to actual and budgeted results to benchmark to our peers.

The following table includes segment sales, significant expense items and segment operating profit as viewed by the CODM for the years ended August 31, 2025, 2024, and 2023 .

Year Ended August 31,

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Service & Rental 116,824 115,506 107,575

IT&S Segment 595,825 571,153 555,178

Other Segment 21,074 18,357 43,026

$ 616,899 $ 589,510 $ 598,204

Cost of Products Sold

IT&S Segment $ 295,335 $ 278,602 $ 274,783

Other Segment 9,661 8,950 26,546

Corporate 74 947 1,836

305,070 288,499 303,165

Operating Profit (Loss)

IT&S Segment 300,490 292,551 280,395

Other Segment 11,413 9,407 16,480

General Corporate ( 35,767 ) ( 62,915 ) ( 48,805 )

Corporate ( 74 ) ( 947 ) ( 1,836 )

311,829 301,011 295,039

Depreciation and Amortization:

Selling, General and Administrative Expenses

IT&S Segment 128,724 129,365 135,797

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166,920 168,565 205,064

Capital Expenditures:

Amortization of Intangible Assets

IT&S Segment 5,404 3,280 3,297

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5,576 3,312 5,112

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

Year Ended August 31,

2025 2024 2023

Restructuring Charges

IT&S Segment 2,493 6,801 5,418

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5,862 7,400 7,096

Impairment & Divestiture Charges

Other Segment — 147 ( 6,155 )

— 147 ( 6,155 )

Operating Profit (Loss)

IT&S Segment 163,869 153,105 135,883

Other Segment 6,063 4,249 10,954

Corporate ( 36,461 ) ( 35,767 ) ( 62,915 )

133,471 121,587 83,922

Operating Profit %

IT&S Segment 27.5 % 26.8 % 24.5 %

Other Segment 28.8 % 23.1 % 25.5 %

Capital Expenditures:

IT&S Segment 8,906 6,079 7,779

Other Segment 434 561 599

Corporate 10,000 4,771 1,022

$ 19,340 $ 11,411 $ 9,400

IT&S Segment $ 672,123 $ 613,797

Other Segment 25,294 26,533

Corporate 130,450 136,998

$ 827,867 $ 777,328

In addition to the impact of changes in foreign currency exchange rates, the comparability of segment and product line information is impacted by acquisition/divestiture activities, impairment and divestiture charges, restructuring costs and related benefits.

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Brazil 25,170 22,769 20,523

Australia 22,165 28,607 26,667

Canada 25,010 19,248 29,643

Australia 23,382 22,165 28,607

China 17,658 16,258 14,081

France 16,133 14,606 14,854

Netherlands 17,525 15,737 11,044

All Other 185,964 178,541 173,440

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Property, Plant and Equipment, net:

United States $ 18,150 $ 15,081

United States of America $ 26,075 $ 18,150

United Kingdom 8,749 7,599

Spain 5,042 1,560

UAE 3,285 3,130

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Netherlands 2,924 2,547

Spain 1,560 1,484

All other 4,229 4,429

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Commitments and Contingencies

We had outstanding commercial letters of credit of $ 4.4 million and surety bonds of $ 3.8 million at August 31, 2024, while we had $ 8.6 million of outstanding letters of credit at August 31, 2023.

Most of these instruments relate to commercial contracts and self-insured workers’ compensation programs.

The Company had outstanding commercial letters of credit of $ 5.9 million and surety bonds of $ 4.8 million at August 31, 2025, and $ 4.4 million of letters of credit and $ 3.8 million of outstanding letters of credit of surety bonds at August 31, 2024 , the majority of which relate to commercial contracts and self-insured workers' compensation programs.

As part of the Company's global sourcing strategy, we have entered into agreements with certain sup pliers 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.

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In the opinion of management, resolution of these contingencies is not expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.

The Company has facilities in numerous geographic locations that are subject to environmental laws and regulations.

Environmental expenditures over the past three years have not been material.

Soil and groundwater contamination has been identified at certain facilities that we operate or formerly owned or operated.

We are also a party to certain state and local environmental matters, have provided environmental indemnifications for certain divested businesses and retain responsibility

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

for certain potential environmental liabilities.

Management believes that such costs will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.

Additionally, in fiscal 2019, the Company provided voluntary self-disclosures to both Dutch and U.S.

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investigation closed without further implication, the Dutch investigation continued.

The Dutch Investigator concluded his investigation in March 2022 and provided the results to the Public Prosecutor's office for review.

The Dutch Investigator concluded his investigation in March 2022 and provided the results to the Public Prosecutor's

ENERPAC TOOL GROUP CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

office for review.

Specifically, the Investigator concluded that the sales transactions violated EU sanctions.

The conclusion in the Investigator's report was consistent with the Company's understanding of what could be stated in the report and supported the Company to record an expense in the fiscal year-ended August 31, 2021, representing the low end of a reasonable range of financial penalties the Company may incur as no other point within the range was deemed more probable.

The Company has not adjusted its estimate of financial penalties as a result of the completion of the investigation in the year ended August 31, 2024.

The matter remains subject to further legal proceedings in the Netherlands.

The Company has not adjusted its estimate of financial penalties as a result of the status of legal proceedings in the year ended August 31, 2025.

While there can be no assurance of the ultimate outcome of the matter, the Company currently believes that there will be no material adverse effect on the Company's financial position, results of operations or cash flows from this matter.

Subsequent Event

On September 4, 2024 , the Company completed the acquisition of DTA the Smart Move, S.A., a global leader in the industrial heavy loads transportation industry, designing and manufacturing mobile robotic solutions.

The purchase price was an initial € 24 million payment plus potential earn-out to be paid at the end of year three that is tied to the achievement of certain financial objectives with a maximum total purchase price of € 36 million.

The acquisition was funded with both cash on hand and borrowings from our existing credit facility.

The Company has not completed the analysis of identifying and estimating the fair value of identifiable intangible assets acquired or the fair value of the earn-out obligation.

We anticipate preparing a preliminary allocation of the purchase consideration to the assets acquired and liabilities assumed by the end of our first quarter of fiscal 2025.

The measurement period for the valuation of net assets acquired ends as soon as information on the facts and circumstances that existed as of the acquisition date becomes available, but not to exceed 12 months following the acquisition date.

Adjustments in purchase price allocations may require a change in the amounts allocated to net assets acquired during the periods in which the adjustments are determined.

ENERPAC TOOL GROUP CORP.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data