Reports Strong Quarter; Narrows Earnings
Guidance Range for Full Year 2024
Second Quarter 2024 Highlights
(All results reflect comparisons to prior-year period, from
continuing operations, unless otherwise noted)
(*Non-GAAP measure. See the attached schedules for adjustments
and reconciliations of historical measures to GAAP measures)
- Sales of $271.9 million down 1.8%; organic sales down 5.0%
- GAAP income from continuing operations attributable to Enpro
Inc., net of tax of $26.7 million compared to a loss of $18.6
million
- Adjusted EBITDA* up 14.0% to $74.0 million; adjusted EBITDA
margin* up 380 bps to 27.2%
- Continued strong performance in Sealing Technologies and
sequential improvement in sales and adjusted segment EBITDA in
Advanced Surface Technologies ("AST")
- GAAP diluted earnings per share from continuing operations of
$1.27, compared to diluted loss per share of $0.89
- Adjusted diluted earnings per share* from continuing operations
up 13.7% to $2.08 versus $1.83
- Narrows full year 2024 earnings guidance for adjusted EBITDA to
the range of $260 to $270 million and adjusted diluted earnings per
share guidance to the range of $7.00 to $7.60. Adjusts full year
2024 revenue guidance to be approximately flat
Enpro Inc. (NYSE: NPO) today announced its financial results for
the quarter and six months ended June 30, 2024.
“Enpro delivered strong performance in the second quarter,
headlined by record profitability in Sealing Technologies. In
Advanced Surface Technologies, we saw sequential improvement in
segment revenue and adjusted segment EBITDA. For the remainder of
the year, while we still expect sequential improvement in AST, we
now expect the magnitude of recovery in semiconductor capital
equipment spending to be more gradual,” said Eric Vaillancourt,
President and Chief Executive Officer. "I am confident that as
market dynamics improve in AST, we are well-positioned to drive
profitable growth and deliver enhanced value for our
shareholders.”
Mr. Vaillancourt added, “Once again, we have demonstrated the
resiliency of Enpro’s differentiated portfolio and business model
as we continue to invest in growth and operational improvement
initiatives across the business. The strength of our balance sheet
provides us with ample flexibility to continue investing across the
company to capitalize on organic growth opportunities, while
pursing strategic acquisitions that complement our best-in-class
portfolio."
Financial Highlights
(Dollars in millions except per share
data)
Quarters Ended
June 30,
2024
2023
Change
Net sales
$
271.9
$
276.9
(1.8
)%
Income (loss) from continuing operations
attributable to Enpro Inc., net of tax
$
26.7
$
(18.6
)
nm
Diluted earnings (loss) per share from
continuing operations
$
1.27
$
(0.89
)
nm
Adjusted income from continuing
operations*
$
43.9
$
38.2
14.9
%
Adjusted diluted earnings per share*
$
2.08
$
1.83
13.7
%
Adjusted EBITDA*
$
74.0
$
64.9
14.0
%
Adjusted EBITDA margin*
27.2
%
23.4
%
*Non-GAAP measure. See the attached
schedules for adjustments and reconciliations to GAAP measures.
Second Quarter 2024 Consolidated Results
Sales of $271.9 million decreased 1.8% compared to last year.
Excluding the impacts of the AMI acquisition and foreign exchange
translation, sales declined 5.0% year-over-year. Slower
semiconductor markets, as well as weaker demand in commercial
vehicle OEM and general industrial in Asia, more than offset the
contribution from strategic pricing actions and strength in nuclear
and aerospace markets. Stability and growth in the company's
aftermarket products and recurring solutions across both segments
contributed positively during the quarter.
Corporate expense of $10.5 million in the second quarter of 2024
decreased from $15.6 million in the second quarter of 2023. Last
year, corporate expense was unfavorably impacted by approximately
$4 million due to mark-to-market valuation of awards under
long-term equity incentive plans, compared to a favorable impact of
approximately $1 million in the current quarter. Changes to the
structure of the incentive plans initiated in 2023 mitigate the
volatility of corporate expenses due to share price
performance.
Income from continuing operations attributable to Enpro Inc.,
net of tax was $26.7 million, compared to a loss of $18.6 million
in the prior-year period. Diluted earnings per share was $1.27,
compared to a loss of $0.89 in the prior year. The year-over-year
increase was driven primarily by operating performance in Sealing
Technologies, lower corporate expense and the non-recurrence of a
non-cash goodwill impairment charge taken last year.
Adjusted net income from continuing operations* of $43.9 million
increased 14.9% compared to the second quarter of 2023 and adjusted
diluted earnings per share* increased 13.7% to $2.08, compared to
$1.83 in the prior-year period.
Adjusted EBITDA* of $74.0 million, or 27.2% of total sales,
increased 14.0% compared to the prior-year period driven primarily
by strong results in the Sealing Technologies segment and lower
corporate expense.
Second Quarter 2024 Segment Highlights
(All results reflect comparisons to prior-year period unless
otherwise noted)
Sealing Technologies -
Safeguarding environments with critical applications in diverse end
markets
Garlock, STEMCO, and Technetics Group
Quarters Ended
June 30,
(Dollars in millions)
2024
2023
Change
Sales
$184.0
$176.7
4.1%
Adjusted segment EBITDA
$65.4
$56.3
16.2%
Adjusted segment EBITDA margin
35.5%
31.9%
- Sales increased 4.1% versus the prior-year period. Excluding
the addition of AMI and foreign exchange translation, sales
decreased 0.8% as weaker demand in commercial vehicle OEM and
general industrial in Asia was offset in part by strategic pricing
actions, strength in nuclear and aerospace, and a slight
improvement in sales in food and pharma.
- Adjusted segment EBITDA of $65.4 million was up 16.2%
year-over-year, with adjusted segment EBITDA margin expanding
approximately 360 basis points. Excluding the impacts of the
acquisition and foreign exchange translation, adjusted segment
EBITDA increased 7.3%. The increase was driven primarily by
favorable mix, strategic pricing actions and effective cost
management.
Advanced Surface
Technologies - Leading edge precision manufacturing,
coatings, cleaning and refurbishment solutions and innovative
optical filter products — NxEdge, Technetics Semi, LeanTeq, and
Alluxa
Quarters Ended
June 30,
(Dollars in millions)
2024
2023
Change
Sales
$88.1
$100.3
(12.2)%
Adjusted segment EBITDA
$19.1
$24.1
(20.7)%
Adjusted segment EBITDA margin
21.7%
24.0%
- Sales decreased 12.2% versus the prior-year period driven
primarily by current semiconductor market conditions.
- Adjusted segment EBITDA decreased 20.7% versus the prior-year
period and adjusted segment EBITDA margin declined by 230 basis
points, driven primarily by the decline in volume.
Balance Sheet, Cash Flow and Capital Allocation
During the six months ended June 30, 2024, the company generated
$49.5 million of cash flow from operating activities of continuing
operations and $35.5 million of free cash flow, net of $14.0
million in capital expenditures. This compares to $78.5 million of
cash flow from operating activities of continuing operations, or
$66.5 million of free cash flow, net of $12.0 million in capital
expenditures in the prior year. During the second quarter, the
company paid a regular quarterly dividend of $0.30 per share, with
dividend payments totaling $12.7 million for the six months ended
June 30, 2024.
Enpro ended the second quarter with total debt of $661.5 million
and cash and cash equivalents of $175.9 million.
Quarterly Dividend
Enpro declared a regular quarterly dividend of $0.30 per share
on August 1, 2024. The dividend is payable on September 18, 2024 to
shareholders of record as of the close of business on September 4,
2024.
2024 Guidance
Enpro now expects 2024 revenue to be approximately flat with
2023, versus prior guidance of low-to-mid single- digit growth.
Expected adjusted EBITDA and adjusted diluted earnings per share
for 2024 are now expected to be in the ranges of $260 million to
$270 million and $7.00 to $7.60, respectively, versus the company’s
prior view of $260 million to $280 million and $7.00 to $7.80,
respectively.
Conference Call, Webcast Information, and
Presentations
Enpro will hold a conference call today, August 6, at 8:30 a.m.
Eastern Time to discuss second quarter 2024 financial results.
Investors who wish to participate in the call should dial
1-877-407-0832 approximately 10 minutes before the call begins and
provide conference access code 13735651. A live audio webcast of
the call and accompanying slide presentation will be accessible
from the company’s website, https://www.enpro.com. To access the
earnings presentation, log on to the webcast by clicking the link
on the company’s home page.
Primary Segment Operating Performance Measure
The primary metric used by management to allocate resources and
assess segment performance is adjusted segment EBITDA, which is
segment revenue reduced by operating expenses and other costs
identifiable with the segment, excluding acquisition and
divestiture expenses, restructuring costs, impairment charges,
non-controlling interest compensation, amortization of the fair
value adjustment to acquisition date inventory, and depreciation
and amortization. Segment non-operating expenses and income,
corporate expenses, net interest expense, and income taxes are not
included in the computation of adjusted segment EBITDA. Under U.S.
generally accepted accounting principles (“GAAP”), the primary
metric used by management to allocate resources and assess segment
performance is required to be disclosed in financial statement
footnotes, and accordingly such metric as presented for each
segment is not deemed to be a non-GAAP measure under applicable
regulations of the Securities and Exchange Commission.
Non-GAAP Financial Information
This press release contains financial measures that have not
been prepared in conformity with GAAP. They include adjusted income
from continuing operations, adjusted diluted earnings per share,
adjusted EBITDA, adjusted EBITDA margin, total adjusted segment
EBITDA and free cash flow. Tables showing the reconciliation of
these historical non-GAAP financial measures to the comparable GAAP
measures are attached to the release. Adjusted EBITDA and adjusted
diluted earnings per share anticipated for full-year 2024 are
calculated in a manner consistent with the historical presentation
of these measures in the attached tables. Because of the
forward-looking nature of these estimates, it is impractical to
present quantitative reconciliations of such measures to comparable
GAAP measures, and accordingly no such GAAP measures are being
presented.
Management believes these non-GAAP metrics are commonly used
financial measures for investors to evaluate the company’s
operating performance and, when read in conjunction with the
company’s consolidated financial statements, present a useful tool
to evaluate the company’s ongoing operations and performance from
period to period. In addition, these are some of the factors the
company uses in internal evaluations of the overall performance of
its businesses. Management acknowledges that there are many items
that impact a company’s reported results and the adjustments
reflected in these non-GAAP measures are not intended to present
all items that may have impacted these results. In addition, these
non-GAAP measures are not necessarily comparable to similarly
titled measures used by other companies.
Forward-Looking Statements and Guidance
Statements in this press release that express a belief,
expectation or intention, including the 2024 guidance and other
statements that are not historical fact, are forward-looking
statements under the Private Securities Litigation Reform Act of
1995. They involve a number of risks and uncertainties that may
cause actual events and results to differ materially from such
forward-looking statements. These risks and uncertainties include,
but are not limited to: economic conditions in the markets served
by the company’s businesses and the businesses of its customers,
some of which are cyclical and experience periodic downturns; the
impact of geopolitical activity on those markets, including
instabilities associated with the armed conflicts in Ukraine and in
the Middle East region and any conflict or threat of conflict that
may affect Taiwan; uncertainties with respect to the imposition of
government embargoes, tariffs and trade protection measures, such
as “anti-dumping” duties applicable to classes of products, and
import or export licensing requirements, as well as the imposition
of trade sanctions against a class of products imported from or
sold and exported to, or the loss of “normal trade relations”
status with, countries in which the company conducts business,
could significantly increase the company’s cost of products or
otherwise reduce its sales and harm its business; uncertainties
with respect to prices and availability of raw materials, including
as a result of instabilities from geopolitical conflicts;
uncertainties with respect to the company’s ability to achieve
anticipated growth within the semiconductor, life sciences, and
other technology-enabled markets, including uncertainties with
respect to receipt of CHIPS Act support and the timing of
completion of the new Arizona facility; the impact of fluctuations
in relevant foreign currency exchange rates or unanticipated
increases in applicable interest rates; unanticipated delays or
problems in introducing new products; the impact of any labor
disputes; announcements by competitors of new products, services or
technological innovations; changes in the company’s pricing
policies or the pricing policies of its competitors; risks related
to the reliance of the Advanced Surface Technologies segment on a
small number of significant customers; uncertainties with respect
to the company’s ability to identify and complete business
acquisitions consistent with its strategy and to successfully
integrate any businesses that it acquires; and uncertainties with
respect to the amount of any payments required to satisfy
contingent liabilities, including those related to discontinued
operations, other divested businesses and discontinued operations
of the company’s predecessors, including liabilities for certain
products, environmental matters, employee benefit and statutory
severance obligations and other matters. Enpro’s filings with the
Securities and Exchange Commission, including its most recent Form
10-K and Form 10-Q reports, describe these and other risks and
uncertainties in more detail. Enpro does not undertake to update
any forward-looking statements made in this press release to
reflect any change in management's expectations or any change in
the assumptions or circumstances on which such statements are
based.
Full-year guidance is subject to the risks and uncertainties
discussed above and specifically excludes changes in the number of
shares outstanding, changes in long-term compensation expense due
to changes in the company’s common stock price, impacts from future
and pending acquisitions, dispositions and related transaction
costs, restructuring costs, incremental impacts of tariffs and
trade tensions on market demand and costs, and the impact of
changes in foreign exchange rates, in each case subsequent to June
30, 2024.
About Enpro Inc.
Enpro is a leading industrial technology company focused on
critical applications across many end-markets, including
semiconductor, industrial process, commercial vehicle, sustainable
power generation, aerospace, food and pharma, photonics and life
sciences. Enpro is listed on the New York Stock Exchange under the
symbol “NPO”. For more information, visit the company’s website at
http://www.enpro.com.
APPENDICES
Consolidated Financial Information and
Reconciliations
Enpro Inc.
Consolidated Statements of Operations
(Unaudited)
For the Quarters and Six Months Ended June
30, 2024 and 2023
(In Millions, Except Per Share Data)
Quarters Ended
Six Months Ended
June 30,
June 30,
June 30,
June 30,
2024
2023
2024
2023
Net sales
$
271.9
$
276.9
$
529.4
$
559.5
Cost of sales
152.9
162.1
304.2
328.6
Gross profit
119.0
114.8
225.2
230.9
Operating expenses:
Selling, general and administrative
70.3
73.2
147.7
144.7
Goodwill impairment
—
60.8
—
60.8
Other
0.7
0.2
1.5
1.0
Total operating expenses
71.0
134.2
149.2
206.5
Operating income (loss)
48.0
(19.4
)
76.0
24.4
Interest expense
(10.7
)
(12.4
)
(21.0
)
(24.1
)
Interest income
1.2
3.8
3.3
7.6
Other expense
(2.1
)
(0.6
)
(7.6
)
(2.4
)
Income (loss) from continuing operations
before income taxes
36.4
(28.6
)
50.7
5.5
Income tax benefit (expense)
(9.7
)
5.8
(11.5
)
(2.3
)
Income (loss) from continuing
operations
26.7
(22.8
)
39.2
3.2
Income from discontinued operations,
including gain on sale, net of tax
—
—
—
11.4
Net income (loss)
26.7
(22.8
)
39.2
14.6
Less: net loss attributable to redeemable
non-controlling interest
—
(4.2
)
—
(4.2
)
Net income (loss) attributable to Enpro
Inc.
$
26.7
$
(18.6
)
$
39.2
$
18.8
Income (loss) attributable to Enpro Inc.
common shareholders:
Income (loss) from continuing operations,
net of tax
$
26.7
$
(18.6
)
$
39.2
$
7.4
Income from discontinued operations,
including gain on sale, net of tax
—
—
—
11.4
Net income (loss) attributable to Enpro
Inc.
$
26.7
$
(18.6
)
$
39.2
$
18.8
Basic earnings (loss) per share:
Continuing operations
$
1.27
$
(0.89
)
$
1.87
$
0.35
Discontinued operations
—
—
—
0.55
Basic earnings (loss) per share
$
1.27
$
(0.89
)
$
1.87
$
0.90
Average common shares outstanding
21.0
20.9
20.9
20.9
Diluted earnings (loss) per share.:
Continuing operations
$
1.27
$
(0.89
)
$
1.86
$
0.35
Discontinued operations
—
—
—
0.55
Diluted earnings (loss) per share
$
1.27
$
(0.89
)
$
1.86
$
0.90
Average common shares outstanding
21.1
20.9
21.1
20.9
Enpro Inc.
Consolidated Statements of Cash Flows
(Unaudited)
For the Six Months Ended June 30, 2024 and
2023
(In Millions)
2024
2023
Operating activities of continuing
operations
Net income
$
39.2
$
14.6
Adjustments to reconcile net income to net
cash provided by operating activities of continuing operations:
Income from discontinued operations, net
of taxes
—
(11.4
)
Taxes related to sale of discontinued
operations
—
(3.3
)
Depreciation
11.8
12.3
Amortization
38.0
35.1
Goodwill impairment
—
60.8
Promissory note reserve
4.5
—
Deferred income taxes
(1.2
)
(0.9
)
Stock-based compensation
6.9
5.4
Other non-cash adjustments
3.3
2.2
Change in assets and liabilities, net of
effects of acquisition and sale of businesses:
Accounts receivable, net
(17.3
)
0.9
Inventories
2.1
(0.1
)
Accounts payable
(6.3
)
(10.9
)
Other current assets and liabilities
(25.0
)
(24.8
)
Other non-current assets and
liabilities
(6.5
)
(1.4
)
Net cash provided by operating activities
of continuing operations
49.5
78.5
Investing activities of continuing
operations
Purchases of property, plant and
equipment
(13.1
)
(11.9
)
Payments for capitalized internal-use
software
(0.9
)
(0.1
)
Proceeds from sale of businesses, net
—
25.7
Purchase of short-term investments
—
(35.8
)
Acquisition
(209.4
)
—
Other
0.3
0.5
Net cash used in investing activities of
continuing operations
(223.1
)
(21.6
)
Financing activities of continuing
operations
Proceeds from debt
52.5
—
Repayments of debt
(38.6
)
(7.9
)
Purchase of non-controlling interest
(17.9
)
—
Dividends paid
(12.7
)
(12.2
)
Other
(2.3
)
(1.8
)
Net cash used in financing activities of
continuing operations
(19.0
)
(21.9
)
Cash flows of discontinued operations
Operating cash flows
—
(0.6
)
Net cash used in discontinued
operations
—
(0.6
)
Effect of exchange rate changes on cash
and cash equivalents
(1.3
)
6.1
Net increase (decrease) in cash and cash
equivalents
(193.9
)
40.5
Cash and cash equivalents at beginning of
period
369.8
334.4
Cash and cash equivalents at end of
period
$
175.9
$
374.9
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest
$
19.9
$
23.3
Income taxes, net of refunds
$
15.8
$
13.6
Enpro Inc.
Consolidated Balance Sheets
(Unaudited)
As of June 30, 2024 and December 31,
2023
(In Millions)
June 30,
December 31,
2024
2023
Current assets
Cash and cash equivalents
$
175.9
$
369.8
Accounts receivable, net
136.2
116.7
Inventories
144.6
142.6
Prepaid expenses and other current
assets
24.1
21.2
Total current assets
480.8
650.3
Property, plant and equipment, net
192.9
193.8
Goodwill
903.5
808.4
Other intangible assets
832.5
733.5
Other assets
112.2
113.5
Total assets
$
2,521.9
$
2,499.5
Current liabilities
Current maturities of long-term debt
$
12.1
$
8.1
Accounts payable
61.8
68.7
Accrued expenses
103.0
119.6
Total current liabilities
176.9
196.4
Long-term debt
649.4
638.7
Deferred taxes and non-current income
taxes payable
153.7
120.7
Other liabilities
111.5
116.1
Total liabilities
1,091.5
1,071.9
Redeemable non-controlling interests
—
17.9
Shareholders’ equity
Common stock
0.2
0.2
Additional paid-in capital
310.6
304.9
Retained earnings
1,154.6
1,128.0
Accumulated other comprehensive loss
(33.8
)
(22.2
)
Common stock held in treasury, at cost
(1.2
)
(1.2
)
Total shareholders’ equity
1,430.4
1,409.7
Total liabilities and equity
$
2,521.9
$
2,499.5
Enpro Inc.
Segment Information (Unaudited)
For the Quarters and Six Months Ended June
30, 2024 and 2023
(Dollars In Millions)
Sales
Quarters Ended
Six Months Ended
June 30,
June 30,
2024
2023
2024
2023
Sealing Technologies
$
184.0
$
176.7
$
355.6
$
350.0
Advanced Surface Technologies
88.1
100.3
174.1
209.7
272.1
277.0
529.7
559.7
Less: intersegment sales
(0.2
)
(0.1
)
(0.3
)
(0.2
)
$
271.9
$
276.9
$
529.4
$
559.5
Income (loss) from continuing
operations attributable to Enpro Inc., net of tax
$
26.7
$
(18.6
)
$
39.2
$
7.4
Earnings before interest, income taxes,
depreciation,
amortization and other selected items
(Adjusted Segment EBITDA)
Quarters Ended
Six Months Ended
June 30,
June 30,
2024
2023
2024
2023
Sealing Technologies
$
65.4
$
56.3
$
118.4
$
106.0
Advanced Surface Technologies
19.1
24.1
36.4
53.5
$
84.5
$
80.4
$
154.8
$
159.5
Adjusted Segment EBITDA Margin
Quarters Ended
Six Months Ended
June 30,
June 30,
2024
2023
2024
2023
Sealing Technologies
35.5
%
31.9
%
33.3
%
30.3
%
Advanced Surface Technologies
21.7
%
24.0
%
20.9
%
25.5
%
31.1
%
29.0
%
29.2
%
28.5
%
Reconciliation of Income (Loss) from
Continuing Operations Attributable to Enpro Inc., Net of Tax to
Adjusted Segment EBITDA
Quarters Ended
Six Months Ended
June 30,
June 30,
2024
2023
2024
2023
Income (loss) from continuing operations
attributable to Enpro Inc., net of tax
$
26.7
$
(18.6
)
$
39.2
$
7.4
Plus: net loss attributable to redeemable
non-controlling interests
—
(4.2
)
—
(4.2
)
Income (loss) from continuing
operations
26.7
(22.8
)
39.2
3.2
Income tax benefit (expense)
(9.7
)
5.8
(11.5
)
(2.3
)
Income (loss) from continuing operations
before income taxes
36.4
(28.6
)
50.7
5.5
Acquisition expenses
0.2
—
3.5
—
Non-controlling interest compensation
allocation
—
(0.7
)
—
(0.3
)
Amortization of the fair value adjustment
to acquisition date inventory
—
—
1.7
—
Restructuring expense
0.6
0.3
1.1
0.7
Depreciation and amortization expense
25.2
23.8
49.8
47.3
Corporate expenses
10.5
15.6
22.7
26.6
Interest expense, net
9.5
8.6
17.7
16.5
Goodwill impairment
—
60.8
—
60.8
Other expense, net
2.1
0.6
7.6
2.4
Adjusted segment EBITDA
$
84.5
$
80.4
$
154.8
$
159.5
Adjusted segment EBITDA is total segment
revenue reduced by operating expenses and other costs identifiable
with the segment, excluding acquisition and divestiture expenses,
restructuring and impairment expense, non-controlling interest
compensation, amortization of the fair value adjustment to
acquisition date inventory, and depreciation and amortization.
Corporate expenses include general
corporate administrative costs. Non-operating expenses not directly
attributable to the segments, corporate expenses, net interest
expense, and income taxes are not included in the computation of
adjusted segment EBITDA. The accounting policies of the reportable
segments are the same as those for the Company.
In 2024, we refined our definition of
adjusted segment EBITDA and corporate expenses to include certain
other income or expenses previously reported in other expense, net.
These items were primarily comprised of bank fees and certain
foreign exchange transaction gains and losses. As a result of this
change, for the quarter ended June 30, 2023, we increased Sealing
Technologies adjusted segment EBITDA by $0.1 million and increased
corporate expenses by $0.6 million. For the six months ended June
30, 2023, we increased Sealing Technologies adjusted segment EBITDA
by $0.1 million, decreased Advanced Surface Technologies adjusted
segment EBITDA by $0.1 million, and increased corporate expenses by
$0.9 million.
Enpro Inc.
Adjusted Segment EBITDA Reconciling
Items by Segment (Unaudited)
For the Quarters and Six Months Ended June
30, 2024 and 2023
(In Millions)
Quarter Ended June 30, 2024
Sealing Technologies
Advanced Surface Technologies
Total Segments
Acquisition expense
$
0.2
$
—
$
0.2
Restructuring and impairment expense
$
0.6
$
—
$
0.6
Depreciation and amortization expense
$
8.3
$
16.9
$
25.2
Quarter Ended June 30, 2023
Sealing Technologies
Advanced Surface Technologies
Total Segments
Non-controlling interest compensation
allocation
$
—
$
(0.7
)
$
(0.7
)
Restructuring and impairment expense
$
0.1
$
0.2
$
0.3
Depreciation and amortization expense
$
6.4
$
17.4
$
23.8
Six Months Ended June 30,
2024
Sealing Technologies
Advanced Surface Technologies
Total Segments
Acquisition expenses
$
3.5
$
—
$
3.5
Amortization of the fair value adjustment
to acquisition date inventory
$
1.7
$
—
$
1.7
Restructuring expense
$
1.1
$
—
$
1.1
Depreciation and amortization expense
$
16.1
$
33.7
$
49.8
Six Months Ended June 30,
2023
Sealing Technologies
Advanced Surface Technologies
Total Segments
Non-controlling interest compensation
allocation
$
—
$
(0.3
)
$
(0.3
)
Restructuring expense
$
0.2
$
0.5
$
0.7
Depreciation and amortization expense
$
12.6
$
34.7
$
47.3
Enpro Inc.
Reconciliation of Income (Loss) from
Continuing Operations Attributable to Enpro Inc., Net of Tax to
Adjusted Income from Continuing Operations and Adjusted Diluted
Earnings Per Share (Unaudited)
For the Quarters and Six Months Ended June
30, 2024 and 2023
(In Millions, Except Per Share Data)
Quarters Ended June 30,
2024
2023
$
Average common shares
outstanding, diluted
Per Share
$
Average common shares
outstanding, diluted
Per Share
Income (loss) from continuing operations
attributable to Enpro Inc., net of tax
$
26.7
21.1
$
1.27
$
(18.6
)
20.9
$
(0.89
)
Net loss from redeemable non-controlling
interests
—
(4.2
)
Income tax benefit (expense)
9.7
(5.8
)
Income (loss) from continuing operations
before income taxes
36.4
(28.6
)
Adjustments from selling, general, and
administrative:
Acquisition and divestiture expenses
0.2
—
Non-controlling interest compensation
allocations
—
(0.7
)
Amortization of acquisition-related
intangible assets
19.2
17.2
Adjustments from other operating expense
and cost of sales:
Restructuring and impairment expense
0.7
0.2
Adjustments from other non-operating
expense:
Asbestos receivable adjustment
(0.6
)
—
Environmental reserve adjustments
2.1
—
Costs associated with previously disposed
businesses
0.1
0.2
Pension expense (non-service cost)
0.1
0.4
Goodwill impairment
—
56.6
Foreign exchange losses related to the
divestiture of a discontinued operation1
0.4
0.3
Other adjustments:
Other
(0.1
)
(0.2
)
Adjusted income from continuing operations
before income taxes
58.5
45.4
Adjusted income tax expense
(14.6
)
(11.4
)
Net loss from redeemable non-controlling
interests
—
4.2
Adjusted income from continuing
operations
$
43.9
21.1
$
2.08
3
$
38.2
20.9
$
1.83
3
Six Months Ended June 30,
2024
2023
$
Average common shares
outstanding, diluted
Per Share
$
Average common shares
outstanding, diluted
Per Share
Income from continuing operations
attributable to Enpro Inc., net of tax
$
39.2
21.1
$
1.86
$
7.4
20.9
$
0.35
Net loss from redeemable non-controlling
interests
—
(4.2
)
Income tax expense
11.5
2.3
Income from continuing operations before
income taxes
50.7
5.5
Adjustments from selling, general, and
administrative:
Acquisition expenses
3.5
—
Non-controlling interest compensation
allocations
—
(0.3
)
Amortization of acquisition-related
intangible assets
37.7
34.4
Adjustments from other operating expense
and cost of sales:
Restructuring expense
1.5
1.0
Amortization of the fair value adjustment
to acquisition date inventory
1.7
—
Adjustments from other non-operating
expense:
Asbestos receivable adjustment
(0.6
)
—
Environmental reserve adjustments
2.3
0.1
Costs associated with previously disposed
businesses
0.4
0.5
Pension expense (non-service cost)
0.1
0.7
Goodwill impairment
—
56.6
Foreign exchange losses related to the
divestiture of a discontinued operation1
0.9
0.9
Long-term promissory note reserve2
4.5
—
Other adjustments:
Other
—
0.3
Adjusted income from continuing operations
before income taxes
102.7
99.7
Adjusted income tax expense
(25.7
)
(24.9
)
Net loss from redeemable non-controlling
interests
—
4.2
Adjusted income from continuing
operations
$
77.0
21.1
$
3.65
3
$
79.0
20.9
$
3.77
3
Management of the Company believes that it
would be helpful to the readers of the financial statements to
understand the impact of certain selected items on the Company's
reported income from continuing operations and diluted earnings per
share, including items that may recur from time to time. The items
adjusted for in this schedule are those that are excluded by
management in budgeting or projecting for performance in future
periods, as they typically relate to events specific to the period
in which they occur. This presentation enables readers to better
compare Enpro Inc. to other diversified industrial technology
companies that do not incur the sporadic impact of restructuring
activities, costs associated with previously disposed of
businesses, acquisitions and divestitures, or other selected items.
The adjustments in the table above relate solely to expenses
attributable to Enpro Inc. and have been adjusted to remove any
amounts attributable to non-controlling interests.
Management acknowledges that there are
many items that impact a company's reported results and this list
is not intended to present all items that may have impacted these
results.
Other adjustments are included in selling,
general, and administrative, cost of sales, and other operating
expenses on the consolidated statements of operations.
The adjusted income tax expense presented
above is calculated using a normalized company-wide effective tax
rate excluding discrete items of 25.0%. Per share amounts were
calculated by dividing by the weighted-average shares of diluted
common stock outstanding during the periods.
1In connection with the sale of GGB,
accounted for as a discontinued operation, in the fourth quarter of
2022, we issued an intercompany note between a domestic and foreign
entity that is denominated in a foreign currency. As a result of
this note, we have recorded losses due to the changes in the
foreign exchange rate. The outstanding note is hedged in order to
minimize related gains or losses.
2We issued a long-term promissory note in
connection to the sale of a divested business. As part of our
regular review of the note, in the first quarter of 2024 we
concluded a reserve was needed for expected future credit losses.
We will continue to monitor the note regularly and make adjustments
to the reserve as needed based on known facts and
circumstances.
3Adjusted diluted earnings per share.
Enpro Inc.
Reconciliation of Income (Loss) from
Continuing Operations Attributable to Enpro Inc., Net of Tax to
Adjusted EBITDA (Unaudited)
For the Six Months Ended June 30, 2024 and
2023
(In Millions)
Quarters Ended
Six Months Ended
June 30,
June 30,
2024
2023
2024
2023
Income (loss) from continuing operations
attributable to Enpro Inc., net of tax
$
26.7
$
(18.6
)
$
39.2
$
7.4
Net loss from redeemable non-controlling
interests
—
(4.2
)
—
(4.2
)
Income (loss) from continuing
operations
26.7
(22.8
)
$
39.2
$
3.2
Adjustments to arrive at earnings before
interest, income taxes, depreciation, amortization, and other
selected items (Adjusted EBITDA):
Interest expense, net
9.5
8.6
17.7
16.5
Income tax expense (benefit)
9.7
(5.8
)
11.5
2.3
Depreciation and amortization expense
25.2
23.9
49.8
47.4
Restructuring expense
0.7
0.2
1.5
1.0
Environmental reserve adjustments
2.1
—
2.3
0.1
Costs associated with previously disposed
businesses
0.1
0.2
0.4
0.5
Acquisition expenses
0.2
—
3.5
—
Pension expense (non-service cost)
0.1
0.4
0.1
0.7
Non-controlling interest compensation
allocation
—
(0.7
)
—
(0.3
)
Asbestos receivable adjustment
(0.6
)
—
(0.6
)
—
Amortization of the fair value adjustment
to acquisition date inventory
—
—
1.7
—
Goodwill impairment
—
60.8
—
60.8
Foreign exchange losses related to the
divestiture of a discontinued operation1
0.4
0.3
0.9
0.9
Long-term promissory note reserve2
—
—
4.5
—
Other
(0.1
)
(0.2
)
—
0.3
Adjusted EBITDA
$
74.0
$
64.9
$
132.5
$
133.4
1In connection with the sale of GGB,
accounted for as a discontinued operation, in the fourth quarter of
2022, we issued an intercompany note between a domestic and foreign
entity that is denominated in a foreign currency. As a result of
this note, we have recorded losses due to the changes in the
foreign exchange rate. The outstanding note is hedged in order to
minimize related gains or losses.
2We issued a long-term promissory note in
connection to the sale of a divested business. As part of our
regular review of the note, in the first quarter of 2024 we
concluded a reserve was needed for expected credit losses. We will
continue to monitor the note regularly and make adjustments to the
reserve as needed based on known facts and circumstances.
Supplemental disclosure: Adjusted EBITDA
as presented also represents the amount defined as "EBITDA" under
the indenture governing the Company's 5.75% Senior Notes due 2026.
For the six months ended June 30, 2024, approximately 46% of the
adjusted EBITDA as presented above was attributable to Enpro's
subsidiaries that do not guarantee the Company's 5.75% Senior Notes
due 2026.
Enpro Inc.
Reconciliation of Free Cash Flow
(Unaudited)
(In Millions)
Free Cash Flow - Six Months Ended June 30,
2024
Net cash provided by operating activities
of continuing operations
$
49.5
Purchases of property, plant, and
equipment
(13.1
)
Payments for capitalized internal-use
software
(0.9
)
Free cash flow
$
35.5
Free Cash Flow - Six Months Ended June 30,
2023
Net cash provided by operating activities
of continuing operations
$
78.5
Purchases of property, plant, and
equipment
(11.9
)
Payments for capitalized internal-use
software
(0.1
)
Free cash flow
$
66.5
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240806306150/en/
Investor Contacts: Joseph F. Bruderek Executive Vice
President and Chief Financial Officer James M. Gentile Vice
President, Investor Relations Phone: 704-731-1527
Email: investor.relations@enpro.com Enpro Inc. 5605
Carnegie Boulevard Charlotte, North Carolina, 28209
www.enpro.com
Enpro (NYSE:NPO)
Historical Stock Chart
From Dec 2024 to Jan 2025
Enpro (NYSE:NPO)
Historical Stock Chart
From Jan 2024 to Jan 2025
