Ladies and gentlemen, thank you for standing by. Welcome to Enerpac Tool Group's First Quarter Earnings Conference Call. As a reminder, this conference is being recorded, December 21, 2022. It is now my pleasure to turn the conference over to Bobbi Belstner, Senior Director of Investor Relations and Strategy. Please go ahead Ms. Belstner.

Thank you, operator. Good morning and thank you for joining us for Enerpac Tool Group's first quarter fiscal '23 earnings conference call. On the call today to present the company's results are Paul Sternlieb, President and Chief Executive Officer; and Tony Colucci, Chief Financial Officer. Also with us is Barb Bolens, Chief Strategy Officer. Our earnings release and slide presentation for today's call are available on our website at enerpactoolgroup.com in the Investors section. We are also recording this call and will archive it on our website. During today's call, we will reference non-GAAP measures such as adjusted profit margins and adjusted earnings. You can find a reconciliation of GAAP to non-GAAP measures in the schedules to this morning's release. We also would like to remind you that we will be making statements in today's call and presentation that are not historical facts and are considered forward-looking statements. We are making those statements pursuant to the Safe Harbor provisions of federal securities laws. Please see our SEC filings for the risks and other factors that may cause actual results to differ materially from forecasts, anticipated results or other forward-looking statements. Now I will turn the call over to Paul.

Thanks, Bobbi and good morning, everyone. Thank you for joining our Q1 earnings call. I am pleased to discuss our fiscal 2023 first quarter results with you this morning. But before we jump into the quarterly results and strategy update, I want to spend a few moments recapping our recent Investor Day that we held in November in New York City. The theme of our Investor Day was raising the bar and the event was a great opportunity to showcase our new management team, share our focused growth strategy, provide an update on our ASCEND transformation program, launch our new long term financial targets and interact with both investors and analysts. We thank all of you that joined us both in person and virtually. If you were not able to attend, we encourage you to watch the replay of the event that is available on our website under the Investors section. Based on the updated growth strategy that we laid out, which includes a focus on four growth verticals including infrastructure, wind, rail and industrial MRO, our digital transformation program, our updated innovation approach and our Asia Pacific growth strategy along with the benefits of our ASCEND transformation program, we issued updated full year financial targets, including 6% to 7% organic revenue CAGR, 25% adjusted EBITDA margins as we exit fiscal 2024 and greater than 25% adjusted EBITDA margins in fiscal '26 and greater than 100% free cash flow conversion in the latter years of the plan as we continue to invest in ASCEND over the next two years. The compounding effect of these targets creates a robust recurring cash generation model that is driven by our strong sales and our solid game plan to achieve margin expansion and we remain confident in our ability to grow and execute. Now…

Thanks, Paul. Turning to Slide 9 for our adjusted Q1 results; net sales of $139 million, which is a 13% increase in core sales over Q1 2022. IT&S product core sales were up 14%, service core sales were up 3% and Courtland core sales were up 26%. Adjusted EBITDA margin was 19% in the quarter, which reflects a currency-neutral incremental profitability of 64% and provided a solid bottom line increase to begin our fiscal year. The adjusted tax rate for the quarter was 16% compared to 15% in the prior year first quarter. This resulted in an adjusted EPS of $0.29, up $0.13 from the prior year first quarter, which is greater than an 80% increase year-over-year. Turning to Slide 10 for details on our sales performance in the first quarter; reported year-over-year net sales were up 6%, including the FX headwind of $7.1 million, driven by the strengthening of the US dollar, primarily related to the euro and GBP. Product core sales increased 15% with over 80% of the increase from our IT&S products and the remainder to Cortland. All regions except MENAC experienced year-over-year double-digit product core sales growth, reflecting continued strong demand for our products. Service core sales grew 3% over Q1 2022, driven by double-digit growth in ASCEND and single digit growth in the Americas and MENAC with MENAC driven by strong oil and gas opportunities. This was partially offset by declines in APAC. Lastly, pricing actions contributed approximately $8 million to the top line. Turning to Slide 11, reflecting a consistent trend from prior year IT&S product net sales significantly exceeded the peak range of the four years prior to COVID and fiscal 2022, driven by strong demand, new product launches, pricing and the execution of our ASCEND strategy. Transitioning to first quarter adjusted EBITDA…

Okay, thanks Tony. In the first three weeks of the fiscal second quarter, demand remained solid and we have not seen a change in order trends from the fourth quarter of fiscal '22. There are no changes to our previously announced fiscal 2023 guidance, which continues to be full year net sales of $565 million to $585 million and an adjusted EBITDA range of $113 million to $123 million, including an ASCEND EBITDA benefit of $12 million to $18 million, with improvement in our typical adjusted EBITDA incremental margins as ASCEND progresses. This is based on foreign exchange rates as noted in September and assumes that there is not a broad based recession. Before I wrap up, I would like to reiterate that I am extremely proud of the work that we have accomplished as an organization since I joined Enerpac Tool Group just over a year ago. We are focused on transforming the business and despite the uncertain global macroeconomic environment, we believe that our strong balance sheet, diversity of end markets and the work that we have done related to our ASCEND transformation program has us well positioned to manage through economic uncertainty, which was evident in our first quarter results. With that, thank you for joining our Q1 earnings call. We hope that everyone has a safe and enjoyable holiday season with your loved ones and we look forward to catching up with you in the New Year. Thank you.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.