What Enerpac Tool Group Corp. told the SEC could break it.

Enerpac's hydraulic tools and components are built from a defined set of industrial raw materials — steel, aluminum, plastic resin, brass, steel wire and rubber — which it discloses are subject to price fluctuations and tariffs that can affect results. While it has historically offset inflation and tariff impacts through productivity and pricing actions, a sustained spike in metals/resin/rubber prices (or tariffs on those inputs) would pressure margins if pricing power lags. A specific, named multi-material commodity-cost dependence typical of an industrial-tools manufacturer.

“Raw materials that go into the components we source, such as steel, aluminum, plastic resin, brass, steel wire and rubber, are subject to price fluctuations and tariffs, which could have an impact on our results.”

Enerpac procures a portion of its components from suppliers located in China, exposing it to potential delivery disruptions and cost increases from political tensions with China, including tariffs and other trade restrictions. The impact is already concrete: it attributes an increase in inventory to incremental tariffs put in place during fiscal 2025. Further tariff escalation or trade restrictions on Chinese-sourced components could raise costs, force re-sourcing, and disrupt timely delivery to customers. A direct, currently-biting China trade-policy exposure on its component supply chain.

“we procure a portion of our components from suppliers located in China, and we are therefore exposed to potential disruptions in deliveries from these suppliers due to political tensions with China, including tariffs and other trade restrictions”

Enerpac outsources component manufacturing — components are built to its highly engineered specifications by a variety of suppliers in best-cost locations, including various countries in Asia. While it states many components have several qualified alternative sources, it single-sources certain components, creating concentrated dependence where no qualified alternative exists. A disruption, quality issue, or delivery failure at a sole-source component supplier could constrain its ability to assemble and ship its hydraulic tools on time. Suppliers are unnamed, so this registers as a sole-source/limited-supplier risk (moderated by its multi-source posture for most items).

“We have built strong relationships with our key suppliers and, while we single source certain of our components, in many cases there are several qualified alternative sources.”