Enerpac Tool Group Corp.

for joining us for Interpac Tool Group's third quarter fiscal 2024 earnings call. On the call today to present the company's results are Paul Sternle, President and Chief Executive Officer, and Shannon Burns, our Interim Principal Financial Officer. Our slides and a recording of today's call will be available on Interpac's website in the Investors section. Today's call will reference non-GAAP measures. You can find a reconciliation of GAAP to non-GAAP measures in the press release issued yesterday. Our comments will also include forward-looking statements that are subject to business risk that could cause actual results to be materially different. Those risks include matters noted in our latest SEC filings. Now I will turn it over to Paul.

Thanks, Travis, and good morning. We continue to be pleased with the strategic progress we made in the quarter, particularly our ability to capture further margin expansion as we enhance operational efficiency and SG&A productivity. While we saw a sequentially slower growth in the third quarter of fiscal 2024, We believe we have continued to outpace the soft general industrial marketplace. Moreover, we demonstrated solid and continued progress toward our long-term financial objectives and the positioning of Interpac as a premier industrial solutions provider. Let me turn the call over to Shannon to review our third quarter performance and our refined full year guidance. Then I'll speak about geographic trends, our exciting progress on innovation, and our continued growth in e-commerce. I will also provide some additional color on our targeted vertical end markets. Shannon?

Thanks, Paul. With a more challenging industrial environment and backdrop, InterPAC still delivered modest organic revenue growth in our industrial tool and services business, or IT&S, with a 1.8% year-over-year gain in the quarter. Product revenue growth of 1% was impacted by a shortfall in HLT revenue in the Asia-Pacific region. Service revenue, which can fluctuate quarter to quarter based on project timing, was strong and expanded 7%. As Paul will discuss, our top-line performance varied by geographic region. IT&S growth was partially offset by a 14% year-over-year decline at Cortland Biomedical. As such, on an organic basis, which excludes divestitures and the impact of foreign exchange, overall sales increased 1.2% year-over-year. Due to the sale of Cortland Industrial in late fiscal 2023, total net sales for the company declined 3.8% year-over-year. Slide 5 reflects the continued progress we've made in improving operating efficiency and SG&A productivity. In the third quarter, gross margins expanded 200 basis points year-over-year to 51.8%. The improvement was driven by operational benefits related to the Ascend transformation program, as well as pricing actions, a favorable sales mix, and the disposition of Cortland Industrial. Looking forward, we expect to benefit from additional lean initiatives in our manufacturing operations, supply chain rationalization, and low-cost country sourcing. Similarly, we continue to benefit from initiatives that improve SG&A efficiency. Adjusted SG&A expense, which excludes ASCEND and other one-time charges for both periods, declined 6% year over year. As a percentage of sales, it improved 50 basis points to 27.0%. And we believe there are further opportunities for improvement, including additional organizational efficiencies, indirect spending rationalization, and further leveraging our shared service center operations. Turning to slide six, with both top line growth and continued gains in operating efficiency and SG&A productivity, adjusted EBITDA increased 5.9% year over year. Adjusted EBITDA margins improved 240 basis points from 24% to 26.4%. On a gap basis, diluted earnings per share from continuing operations totaled 41 cents in the quarter. Adjusted EPS increased 21% to 47 cents, which benefited from a lower effective tax rate and a lower share count. In the third quarter of fiscal 2024, cash provided by operations was $30 million compared to $17 million in the year-ago period. The improvement was due to higher net earnings, lower Ascend-related cash payments, and continued improvement in working capital management. As noted on slide 7, year-to-date organic revenue increased 2.8% year-over-year, with IT&S ahead 3.4%. Adjusted EBITDA is up 13%, representing a margin of 25.3%. Year-to-date, we generated free cash flow of $32 million, an increase of 66% over the year-ago period. Please keep in mind, our fourth quarter is typically our largest cash generation period. As we previously discussed, Enterpact's liquidity and balance sheet remain strong. At the end of the third quarter, net debt was $63 million, resulting in net debt leverage ratio of 0.5 times adjusted EBITDA. Total liquidity was approximately $530 million. where we remain focused on a disciplined capital deployment strategy to enhance returns and create shareholder value. Moving on to guidance. With three quarters of fiscal 2024 now behind us, we have adjusted our full year revenue guidance to reflect new FX assumptions with a roughly $5 million headwind, and we tightened the range. We now anticipate organic revenue growth of 2% to 3% and net sales of $585 to $590 million. As for adjusted EBITDA, we have narrowed the range and raised the midpoint. We now project full year adjusted EBITDA of $147 to $150 million compared with the previous guidance of $142 to $152 million. The new guidance translates to an adjusted EBITDA margin of 25.1 to 25.4% for the full year. Lastly, we are expecting lower capex spending this year and now project capex of $8 million to $13 million, down from the previous guidance of $12 million to $17 million. The lower capex projection is driven mainly by the timing of our company headquarter relocation to downtown Milwaukee, with a significant portion of the spend now scheduled to fall into the first half of fiscal 2025. All other guidance remains unchanged. With that, let me turn the call back to Paul.