Enerpac Tool Group Corp.

earnings call on the call today to present the company's results are Paul sternly president and chief executive officer and Darren Kozik chief financial officer the slides referenced on today's call are available on the investor relations section of the company's website which you can download and follow along a recording of today's call will also be made available on our website today's call will reference non gap measures you can find a reconciliation of gap to non gap 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. I'd like to welcome Darren to his first InterPAC earnings call. He's been on board as our CFO for nearly two months and is coming up to speed very quickly. We're thrilled to have him on the team. And now, switching to the quarter and beyond. We enter fiscal 2025 mindful of a continued sluggish industrial macro environment as evidenced by persistently weak manufacturing PMI and industrial production trends you can see on slide three. While we saw a decline in the Americas region of our industrial tools and services business due to these challenging market conditions, we were pleased to report sales growth across Interpax's two other geographic regions and at Cortland Biomedical. Overall, we believe Enerpac can continue to outperform the market given our global brand leadership, targeted growth strategy, customer-driven innovation, and continuous improvement process to enhance operational efficiency and productivity. In light of the global macro situation, we are actively monitoring costs in the short term to ensure our cost structure aligns with business conditions. We also have a detailed strategy that will enable us to continue to enhance profitability on a longer-term basis, which I will speak to in a moment. In the meantime, I'll turn the call over to Darren to elaborate on our financial performance in the quarter.

Thanks, Paul. As seen in slide 4, Interpac's total revenue increased 2.3% in the first quarter of 2025. At our IT&S business, revenue increased 2.3% year-over-year, with a 1% decline in organic sales. The slight decline in Organic sales was comprised of a 5.6% increase in service revenue, offset by a 3% decrease in product sales. Paul will speak about the regional performance later in the call. Results for the first quarter included nearly a full quarter of revenue from DTA, an acquisition we closed on September 4th. In the quarter, we made solid progress in integration and delivered more than $3 million in revenue and $5 million in order volume. We are excited about the combination of DTA with our heavy lifting technology or HLT business and expect growth benefits as we expand DTA sales beyond Europe by leveraging Interpac's global commercial network. Therefore, we are maintaining our expectation of a full year 2025 sales of 20 million euros from DTA. At Cortland Biomedical, reported in our other segment, we generated another quarter of growth with a year-over-year revenue increase of 2.6%. Turning to slide five, gross profit margin declined 90 basis points year-over-year to 51.4%. This was primarily due to lower sales in the Americas, a higher percentage of service revenue, and a return to normalized margins at Cortland, which remains accretive to InterPAC's overall performance. Adjusted SG&A held flat at 29% of revenue, despite the inclusion of DTA, reflecting our ability to manage our cost base. We will continue to monitor costs closely in the second quarter given the environment. Adjusted EBITDA margins declined 100 basis points in the first quarter of 2025 due to the gross margin discussed and the inclusion of DTA. Adjusted earnings per share were 40 cents for the first quarter of 2025 compared with 39 cents in the year-ago period, a 3% increase. The effective tax rate was nearly flat at 22% compared with 21.9% in the year-ago period. Turning to the balance sheet shown on slide six, Interpac's position remains extremely strong. Net debt was $63 million, resulting in net debt leverage of 0.5 times adjusted EBITDA at the end of the first quarter. Total liquidity was $529 million. In the quarter, free cash flow improved $11 million from the prior year period as a result of higher net earnings and lower annual incentive compensation payments, which more than offset the increased capex related to our upcoming headquarter relocation. We remain very excited about the move and the benefits it will have for the company. As we continue to generate cash, coupled with our current leverage, we have the needed capacity to deploy capital for our disciplined M&A strategy, as well as internal investments and continued opportunistic share repurchases. With that, let me turn it back to Paul to discuss our commercial performance by region.