Enerpac Tool Group Corp. (NYSE:EPAC) Q4 2023 Earnings Call Transcript

Specifically, the Track Tools system for rail maintenance has the advantage of minimizing or eliminating service disruptions, while providing safer operation than traditional lifting systems. Track Tools also adds established customer relationships and a solution that we can sell to the global marketplace. Now, let me switch gears briefly to talk about the success of our ASCEND transformation program. In terms of our go-to-market strategy, we have realigned our resources to better match sales opportunities and focus on our four key vertical markets. Of recent note, we have expanded our reach in rail through the addition of several new business development resources. We’ve also targeted demand generation activities to expand our customer universe in rail, focused on industry trade shows, social media, and follow-up on government project funding.

We have also implemented numerous initiatives around improving operational excellence and production efficiency. We are continuing our SKU rationalization initiatives and we’ve set ambitious goals for driving more productivity in manufacturing, logistics and sourcing, while also improving lead times and on-time delivery performance. We made good progress reducing our past due backlog in fiscal 2023 as our supply chain started to normalize. As Tony discussed, our operational improvement efforts have already attributed to a solid expansion in gross margins. We’re also executing a series of SG&A productivity initiatives, employing technology to create a leaner and more agile organization. Similarly, these efforts have already enabled us to substantially reduce SG&A as a percentage of sales, a trend that we expect to continue as we work toward achieving best-in-class levels in the industrial sector over time.

Of course, none of our progress would be possible without the hard work and commitment of Enerpac employees around the globe. They are the driving force behind our transformation to a premier industrial tools and service business. I’d like to thank all our employees for their contributions in fiscal 2023, which enabled us to deliver strong results as a team. Thank you for joining us this morning for our year-end call. As always, Travis will be available to take any follow-up questions. And for those who are interested, we will be attending the Baird Global Industrial Conference on November 8 in Chicago. Thank you, and have a good day.

Operator: