First 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 $257.5 million down 8.9%; organic sales down
11.6%
- GAAP income from continuing operations of $12.5 million
compared to $26.0 million
- Strong performance in Sealing Technologies offset by softness
in Advanced Surface Technologies
- Adjusted EBITDA* down 14.9% to $58.4 million; adjusted EBITDA
margin* down 160 bps to 22.7%
- GAAP diluted earnings per share from continuing operations of
$0.59, compared to diluted earnings per share of $1.24
- Adjusted diluted earnings per share* from continuing operations
down 19.5% to $1.57 versus $1.95
- Completed the acquisition of Advanced Micro Instruments, Inc.
("AMI") on January 29, 2024
- Maintain full year 2024 guidance for revenue growth of
low-to-mid single digits, adjusted EBITDA guidance of $260-$280
million and adjusted diluted earnings per share guidance in the
range of $7.00 to $7.80
Enpro Inc. (NYSE: NPO) today announced its financial results for
the three months ended March 31, 2024.
“We began the year with strong profitability in Sealing
Technologies, and, as expected, continued softness in Advanced
Surface Technologies resulting from semiconductor market
conditions,” said Eric Vaillancourt, President and Chief Executive
Officer. "Our disciplined and focused execution across our business
continues to deliver outstanding results in a choppy demand
environment, demonstrating the resilience of the Enpro
portfolio.”
Mr. Vaillancourt added, “We’re excited about the addition of the
AMI business, which closed in late January. Our balance sheet
remains healthy, and we have ample flexibility to invest in organic
growth opportunities and value-added projects throughout the
enterprise, while building our acquisition pipeline of attractive
businesses that meet our strategic and financial criteria. We are
well-positioned to continue executing on our long-term value
creating strategy while delivering critical solutions to our
customers.”
Financial Highlights
(Dollars in millions except per share
data)
Quarters Ended March
31,
2024
2023
Change
Net Sales
$
257.5
$
282.6
(8.9
)%
Income from Continuing Operations
$
12.5
$
26.0
(51.9
)%
Diluted Earnings Per Share from Continuing
Operations
$
0.59
$
1.24
(52.4
)%
Adjusted Net Income from Continuing
Operations*
$
33.1
$
40.7
(18.7
)%
Adjusted Diluted Earnings Per Share from
Continuing Operations*
$
1.57
$
1.95
(19.5
)%
Adjusted EBITDA*
$
58.4
$
68.6
(14.9
)%
Adjusted EBITDA Margin*
22.7
%
24.3
%
*Non-GAAP measure. See the attached
schedules for adjustments and reconciliations to GAAP measures.
First Quarter 2024 Consolidated Results
Sales of $257.5 million decreased 8.9% compared to last year.
Excluding the impacts of the AMI acquisition and foreign exchange
translation, sales declined 11.6% year-over-year. Slower
semiconductor markets, as well as weaker demand in commercial
vehicle and food and pharmaceutical, more than offset the
contribution from pricing actions and strength in nuclear and
aerospace markets.
Corporate expenses of $12.2 million in the first quarter of 2024
increased from $11.0 million in the first quarter of 2023. Last
year, corporate expense benefited by a favorable $1.9 million
mark-to-market valuation of long-term equity incentive plans.
Income from continuing operations was $12.5 million, compared to
$26.0 million in the prior-year period. Diluted earnings per share
was $0.59, compared to $1.24 in the prior year. The year-over-year
change was driven primarily by weakness in the Advanced Surface
Technologies (or “AST”) segment and an increase in the valuation
reserve on a long-term promissory note received in partial
consideration for the sale of a non-strategic business in 2020.
Adjusted net income from continuing operations of $33.1 million
decreased 18.7% compared to the first quarter of 2023 and adjusted
diluted earnings per share from continuing operations decreased
19.5% to $1.57, compared to $1.95 in the prior-year period.
Adjusted EBITDA* of $58.4 million, or 22.7% of total sales,
decreased 14.9% compared to the prior-year period driven primarily
by results in the AST segment.
First 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 March
31,
(Dollars in millions)
2024
2023
Change
Sales
$171.6
$173.3
(1.0)%
Adjusted Segment EBITDA
$53.0
$49.7
6.6%
Adjusted Segment EBITDA Margin
30.9%
28.7%
- Sales decreased 1.0% versus the prior-year period. Excluding
the addition of AMI and foreign exchange translation, sales
decreased 5.4% as weaker demand in commercial vehicle, general
industrial in Asia and food and pharmaceutical was offset in part
by pricing gains and strength in nuclear and aerospace.
- Adjusted segment EBITDA of $53.0 million was up 6.6%
year-over-year, with adjusted EBITDA margins expanding
approximately 220 basis points. Excluding the impacts of the
acquisition and foreign exchange translation, adjusted segment
EBITDA decreased 2.0% compared to the prior-year period. The
decrease was driven mainly by lower volume, offset in part by
pricing gains, favorable mix 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 March
31,
(Dollars in millions)
2024
2023
Change
Sales
$86.0
$109.4
(21.4)%
Adjusted Segment EBITDA
$17.3
$29.4
(41.2)%
Adjusted Segment EBITDA Margin
20.1%
26.9%
- Sales decreased 21.4% versus the prior-year period driven
primarily by the current slowdown in semiconductor capital
equipment spending and, to a lesser extent, lower sales of optical
filter solutions.
- Adjusted segment EBITDA decreased 41.2% versus the prior-year
period and segment EBITDA margins declined by 680 basis points,
driven primarily by the decline in volume.
Balance Sheet, Cash Flow and Capital Allocation
The company generated $6.3 million of cash flow from operating
activities of continuing operations during the three months ended
March 31, 2024 and $(1.9) million of free cash flow, net of $8.2
million in capital expenditures. This compares to $26.4 million of
cash flow from operating activities of continuing operations, or
$21.4 million of free cash flow, net of $5.0 million in capital
expenditures in the prior year. During the first quarter, the
company paid a regular quarterly dividend of $0.30 per share, with
dividend payments totaling $6.4 million for the three months ended
March 31, 2024.
Enpro ended the first quarter with total debt of $680.1 million
and cash of $163.9 million.
Quarterly Dividend
Enpro declared a regular quarterly dividend of $0.30 per share
on May 2, 2024. The dividend is payable on June 20, 2024 to
shareholders of record as of the close of business on June 5,
2024.
2024 Guidance
Enpro continues to expect 2024 revenue growth in the low-to-mid
single digit range compared to 2023. Expected adjusted EBITDA and
adjusted diluted earnings per share for 2024 remain at $260 million
to $280 million and $7.00-$7.80, respectively.
Conference Call, Webcast Information, and
Presentations
Enpro will hold a conference call today, May 7, at 8:30 a.m.
Eastern Time to discuss first 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 13735650. 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 net
income, 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 AST 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 report, 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 March
31, 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 Three Months Ended March 31, 2024
and 2023
(In Millions, Except Per Share Data)
2024
2023
Net sales
$
257.5
$
282.6
Cost of sales
151.3
166.5
Gross profit
106.2
116.1
Operating expenses:
Selling, general and administrative
77.4
71.5
Other
0.8
0.8
Total operating expenses
78.2
72.3
Operating income
28.0
43.8
Interest expense
(10.3
)
(11.7
)
Interest income
2.1
3.8
Other expense
(5.5
)
(1.8
)
Income from continuing operations before
income taxes
14.3
34.1
Income tax expense
(1.8
)
(8.1
)
Income from continuing operations
12.5
26.0
Income from discontinued operations,
including gain on sale, net of tax
—
11.4
Net income
$
12.5
$
37.4
Basic earnings per share:
Continuing operations
$
0.60
$
1.25
Discontinued operations
—
0.55
Basic earnings per share
$
0.60
$
1.80
Average common shares outstanding
20.9
20.8
Diluted earnings per share.:
Continuing Operations
$
0.59
$
1.24
Discontinued operations
—
0.55
Diluted earnings per share
$
0.59
$
1.79
Average common shares outstanding
21.1
20.9
Enpro Inc.
Consolidated Statements of Cash Flows
(Unaudited)
For the Three Months Ended March 31, 2024
and 2023
(In Millions)
2024
2023
Operating activities of continuing
operations
Net income
$
12.5
$
37.4
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
—
(3.5
)
Depreciation
5.9
6.0
Amortization
18.7
17.6
Promissory note reserve
4.5
—
Deferred income taxes
(0.6
)
(0.4
)
Stock-based compensation
2.9
2.4
Other non-cash adjustments
2.0
1.1
Change in assets and liabilities, net of
effects of acquisition and sale of businesses:
Accounts receivable, net
(14.7
)
(11.5
)
Inventories
0.6
(4.9
)
Accounts payable
(7.7
)
(4.6
)
Other current assets and liabilities
(15.0
)
(0.9
)
Other non-current assets and
liabilities
(2.8
)
(0.9
)
Net cash provided by operating activities
of continuing operations
6.3
26.4
Investing activities of continuing
operations
Purchases of property, plant and
equipment
(8.2
)
(5.0
)
Proceeds from sale of businesses, net
0.1
25.3
Purchase of short-term investments
—
(35.0
)
Acquisition
(208.9
)
—
Other
—
(0.1
)
Net cash used in investing activities of
continuing operations
(217.0
)
(14.8
)
Financing activities of continuing
operations
Proceeds from debt
39.5
—
Repayments of debt
(6.5
)
(4.0
)
Purchase of non-controlling interest
(17.9
)
—
Dividends paid
(6.4
)
(6.2
)
Other
(2.5
)
(1.8
)
Net cash provided by (used in) financing
activities of continuing operations
6.2
(12.0
)
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
(1.4
)
2.7
Net increase (decrease) in cash and cash
equivalents
(205.9
)
1.7
Cash and cash equivalents at beginning of
period
369.8
334.4
Cash and cash equivalents at end of
period
$
163.9
$
336.1
Supplemental disclosures of cash flow
information:
Cash paid (received) during the period
for:
Interest
$
5.3
$
7.0
Income taxes, net of refunds
$
4.6
$
(0.1
)
Enpro Inc.
Consolidated Balance Sheets
(Unaudited)
As of March 31, 2024 and December 31,
2023
(In Millions)
March 31,
December 31,
2024
2023
Current assets
Cash and cash equivalents
$
163.9
$
369.8
Accounts receivable, net
134.0
116.7
Inventories
146.4
142.6
Prepaid expenses and other current
assets
19.9
21.2
Total current assets
464.2
650.3
Property, plant and equipment, net
194.7
193.8
Goodwill
903.4
808.4
Other intangible assets
853.1
733.5
Other assets
112.4
113.5
Total assets
$
2,527.8
$
2,499.5
Current liabilities
Current maturities of long-term debt
$
10.1
$
8.1
Accounts payable
60.4
68.7
Accrued expenses
108.7
119.6
Total current liabilities
179.2
196.4
Long-term debt
670.0
638.7
Deferred taxes and non-current income
taxes payable
152.7
120.7
Other liabilities
112.0
116.1
Total liabilities
1,113.9
1,071.9
Redeemable non-controlling interests
—
17.9
Shareholders’ equity
Common stock
0.2
0.2
Additional paid-in capital
306.4
304.9
Retained earnings
1,134.2
1,128.0
Accumulated other comprehensive loss
(25.7
)
(22.2
)
Common stock held in treasury, at cost
(1.2
)
(1.2
)
Total shareholders’ equity
1,413.9
1,409.7
Total liabilities and equity
$
2,527.8
$
2,499.5
Enpro Inc.
Segment Information (Unaudited)
For the Three Months Ended March 31, 2024
and 2023
(Dollars In Millions)
Sales
2024
2023
Sealing Technologies
$
171.6
$
173.3
Advanced Surface Technologies
86.0
109.4
257.6
282.7
Less: intersegment sales
(0.1
)
(0.1
)
$
257.5
$
282.6
Income from continuing
operations
$
12.5
$
26.0
Earnings before interest, income taxes,
depreciation,
amortization and other selected items
(Adjusted Segment EBITDA)
2024
2023
Sealing Technologies
$
53.0
$
49.7
Advanced Surface Technologies
17.3
29.4
$
70.3
$
79.1
Adjusted Segment EBITDA Margin
2024
2023
Sealing Technologies
30.9
%
28.7
%
Advanced Surface Technologies
20.1
%
26.9
%
27.3
%
28.0
%
Reconciliation of Adjusted Segment
EBITDA to Income from Continuing Operations
2024
2023
Income from continuing operations
12.5
26.0
Income tax expense
(1.8
)
(8.1
)
Income from continuing operations before
income taxes
14.3
34.1
Acquisition expenses
3.3
—
Non-controlling interest compensation
allocation1
—
0.4
Amortization of the fair value adjustment
to acquisition date inventory
1.7
—
Restructuring expense
0.5
0.4
Depreciation and amortization expense
24.6
23.5
Corporate expenses
12.2
11.0
Interest expense, net
8.2
7.9
Other expense, net
5.5
1.8
Adjusted Segment EBITDA
$
70.3
$
79.1
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 March 31, 2023, we decreased Advanced
Surface Technologies adjusted segment EBITDA by $0.1 million and
increased corporate expenses by $0.3 million.
1 Non-controlling interest compensation
allocation represents compensation expense adjustment associated
with a portion of the rollover equity from the acquisition of
Alluxa that was subject to reduction for certain types of
employment terminations of the Alluxa sellers and is directly
related to the terms of the acquisition. This expense was
recognized as compensation expense over the term of the put and
call option associated with the acquisition unless certain
employment terminations occurred. The Alluxa non-controlling
interests were acquired in February 2024.
Enpro Inc.
Adjusted Segment EBITDA Reconciling
Items by Segment (Unaudited)
For the Three Months Ended March 31, 2024
and 2023
(In Millions)
Three Months Ended March 31,
2024
Sealing Technologies
Advanced Surface Technologies
Total Segments
Acquisition expenses
$
3.3
$
—
$
3.3
Amortization of the fair value adjustment
to acquisition date inventory
$
1.7
$
—
$
1.7
Restructuring expense
$
0.5
$
—
$
0.5
Depreciation and amortization expense
$
7.7
$
16.9
$
24.6
Three Months Ended March 31,
2023
Sealing Technologies
Advanced Surface Technologies
Total Segments
Non-controlling interest compensation
allocation1
$
—
$
0.4
$
0.4
Restructuring expense
$
—
$
0.4
$
0.4
Depreciation and amortization expense
$
6.3
$
17.2
$
23.5
1 Non-controlling interest compensation
allocation represents compensation expense adjustment associated
with a portion of the rollover equity from the acquisition of
Alluxa that was subject to reduction for certain types of
employment terminations of the Alluxa sellers and is directly
related to the terms of the acquisition. This expense was
recognized as compensation expense over the term of the put and
call option associated with the acquisition unless certain
employment terminations occurred. The Alluxa non-controlling
interests were acquired in February 2024.
Enpro Inc.
Reconciliation of Income from
Continuing Operations to Adjusted Income from Continuing Operations
and Adjusted Diluted Earnings Per Share (Unaudited)
For the Three Months Ended March 31, 2024
and 2023
(In Millions, Except Per Share Data)
2024
2023
$
Average common shares
outstanding, diluted
Per Share
$
Average common shares
outstanding, diluted
Per Share
Income from continuing operations
$
12.5
21.1
$
0.59
$
26.0
20.9
$
1.24
Income tax expense
1.8
8.1
Income from continuing operations before
income taxes
14.3
34.1
Adjustments from selling, general, and
administrative:
Acquisition expenses
3.3
—
Non-controlling interest compensation
allocations1
—
0.3
Amortization of acquisition-related
intangible assets
18.6
17.2
Adjustments from other operating expense
and cost of sales:
Restructuring expense
0.8
0.8
Amortization of the fair value adjustment
to acquisition date inventory
1.7
—
Adjustments from other non-operating
expense:
Environmental reserve adjustments
0.2
0.1
Costs associated with previously disposed
businesses
0.3
0.2
Pension expense
—
0.4
Foreign exchange losses related to the
divestiture of a discontinued operation2
0.5
0.7
Long-term promissory note reserve3
4.5
—
Other adjustments:
Other
—
0.4
Adjusted income from continuing operations
before income taxes
44.2
54.2
Adjusted income tax expense
(11.1
)
(13.5
)
Adjusted income from continuing
operations
$
33.1
21.1
$
1.57
4
$
40.7
20.9
$
1.95
4
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.
1 Non-controlling interest compensation
allocation represents compensation expense adjustment associated
with a portion of the rollover equity from the acquisition of
Alluxa that was subject to reduction for certain types of
employment terminations of the Alluxa sellers and is directly
related to the terms of the acquisition. This expense was
recognized as compensation expense over the term of the put and
call option associated with the acquisition unless certain
employment terminations occurred. The Alluxa non-controlling
interests were acquired in February 2024.
2 In 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.
3 We 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.
4 Adjusted diluted earnings per share.
Enpro Inc.
Reconciliation of Income from
Continuing Operations to Adjusted EBITDA (Unaudited)
For the Three Months Ended March 31, 2024
and 2023
(In Millions)
Three Months Ended
March 31,
2024
2023
Income from continuing operations
$
12.5
$
26.0
Adjustments to arrive at earnings before
interest, income taxes, depreciation, amortization, and other
selected items (Adjusted EBITDA):
Interest expense, net
8.2
7.9
Income tax expense
1.8
8.1
Depreciation and amortization expense
24.6
23.6
Restructuring expense
0.8
0.8
Environmental reserve adjustments
0.2
0.1
Costs associated with previously disposed
businesses
0.3
0.2
Acquisition expenses
3.3
—
Pension expense
—
0.4
Non-controlling interest compensation
allocation1
—
0.4
Amortization of the fair value adjustment
to acquisition date inventory
1.7
—
Foreign exchange losses related to the
divestiture of a discontinued operation2
0.5
0.7
Long-term promissory note reserve3
4.5
—
Other
—
0.4
Adjusted EBITDA
$
58.4
$
68.6
1 Non-controlling interest compensation
allocation represents compensation expense adjustment associated
with a portion of the rollover equity from the acquisition of
Alluxa that was subject to reduction for certain types of
employment terminations of the Alluxa sellers and is directly
related to the terms of the acquisition. This expense was
recognized as compensation expense over the term of the put and
call option associated with the acquisition unless certain
employment terminations occurred. The Alluxa non-controlling
interests were acquired in February 2024.
2 In 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.
3 We 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 three months ended March 31, 2024, approximately 47% 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 - Three Months Ended March
31, 2024
Net cash provided by operating activities
of continuing operations
$
6.3
Purchases of property, plant, and
equipment
(8.2
)
Free cash flow
$
(1.9
)
Free Cash Flow - Three Months Ended March
31, 2023
Net cash provided by operating activities
of continuing operations
$
26.4
Purchases of property, plant, and
equipment
(5.0
)
Free cash flow
$
21.4
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240507351732/en/
Investor Contacts: Milt Childress Executive Vice
President and Chief Financial Officer James Gentile Vice President,
Investor Relations 704-731-1527
investor.relations@enproindustries.com
Enpro (NYSE:NPO)
Gráfico Histórico do Ativo
De Mai 2024 até Jun 2024
Enpro (NYSE:NPO)
Gráfico Histórico do Ativo
De Jun 2023 até Jun 2024