Enpro Reports Fourth Quarter and Full Year 2023 Results, Introduces 2024 Guidance Fourth Quarter Results Full Year 2023 Highlights
(All results reflect comparisons to the respective prior-year period unless otherwise noted)
-
Sales of
$249.1 million decreased 8.4% and organic sales decreased 9.0% -
GAAP loss from continuing operations attributable to
improved toEnpro Inc .$4.9 million , compared to a GAAP loss of$57.5 million last year -
Adjusted EBITDA* decreased 12.2% to
$46.9 million -
Diluted loss per share from continuing operations attributable to
Enpro Inc. improved to$0.23 , compared to a diluted loss per share of$2.76 -
Adjusted diluted earnings per share* decreased 8.5% to
$1.19 versus$1.30 last year
Full Year 2023 Results
-
Sales of
$1.06 billion decreased 3.6% and organic sales decreased 3.3% -
GAAP income from continuing operations attributable to
Enpro Inc. increased$10.8 million , compared to income of$6.7 million last year -
Adjusted EBITDA* decreased 7.5% to
$238.0 million -
Diluted earnings per share from continuing operations attributable to
Enpro Inc. increased to$0.51 , compared to diluted earnings per share of$0.32 last year -
Adjusted diluted earnings per share* decreased 3.7% to
$6.54 versus$6.79 last year
2024 Guidance and Update
-
Introducing guidance for 2024: revenue growth in the low to mid-single-digit range, adjusted EBITDA* in the range of
$260 million to$280 million and adjusted diluted earnings per share* of$7.00 to$7.80 -
Subsequent to quarter end, in late January Enpro completed the previously announced acquisition of
Advanced Micro Instruments, Inc. ("AMI") for$210 million - Entering 2024 with a net leverage ratio of 2.0x, inclusive of the recently completed AMI transaction
- Strong balance sheet and robust free cash flow provide significant financial flexibility to further organic growth initiatives and strategic acquisitions
"We are pleased with Enpro’s strong performance and execution in 2023. Sealing Technologies delivered record profitability that largely offset softness in Advanced Surface Technologies due to continued weakness in the global semiconductor industry.” said
Financial Highlights (Amounts in millions except per share data and percentages) |
||||||||||||||||||
|
Quarters Ended |
|
Years Ended |
|||||||||||||||
|
2023 |
2022 |
Change |
|
2023 |
2022 |
Change |
|||||||||||
|
$ |
249.1 |
|
$ |
271.9 |
|
(8.4 |
)% |
|
$ |
1,059.3 |
|
$ |
1,099.2 |
|
(3.6 |
)% |
|
Income (Loss) from Continuing Operations Attributable to |
$ |
(4.9 |
) |
$ |
(57.5 |
) |
nm |
|
$ |
10.8 |
|
$ |
6.7 |
|
61.2 |
% |
||
Diluted Earnings (Loss) Per Share Attributable to |
$ |
(0.23 |
) |
$ |
(2.76 |
) |
nm |
|
$ |
0.51 |
|
$ |
0.32 |
|
59.4 |
% |
||
Adjusted Income from Continuing Operations Attributable to |
$ |
25.0 |
|
$ |
27.1 |
|
(7.7 |
)% |
|
$ |
137.0 |
|
$ |
141.8 |
|
(3.4 |
)% |
|
Adjusted Diluted Earnings Per Share* |
$ |
1.19 |
|
$ |
1.30 |
|
(8.5 |
)% |
|
$ |
6.54 |
|
$ |
6.79 |
|
(3.7 |
)% |
|
Adjusted EBITDA* |
$ |
46.9 |
|
$ |
53.4 |
|
(12.2 |
)% |
|
$ |
238.0 |
|
$ |
257.4 |
|
(7.5 |
)% |
|
Adjusted EBITDA Margin* |
|
18.8 |
% |
|
19.6 |
% |
|
|
|
22.5 |
% |
|
23.4 |
% |
|
*Non-GAAP measure. See the attached schedules for adjustments and reconciliations of historical non-GAAP measures to GAAP measures. No reconciliation is presented for the 2024 guidance range of adjusted EBITDA and adjusted diluted earnings per share from continuing operations. Because of the forward-looking nature of these estimates, it is impractical to present quantitative reconciliations of such measures to comparable GAAP measures. |
Fourth Quarter 2023 Consolidated Results of Continuing Operations
Sales of
Corporate expenses of
Loss from continuing operations attributable to
Adjusted EBITDA* of
The incremental
Fourth Quarter 2023 Segment Highlights of Continuing Operations
Sealing Technologies
- Safeguarding environments with critical applications in diverse end markets
Garlock, STEMCO, and
|
Quarters Ended |
|
Years Ended |
||||||||||||||
(Amounts in millions except percentages) |
2023 |
2022 |
Change |
|
2023 |
2022 |
Change |
||||||||||
Sales |
$ |
147.0 |
|
$ |
156.9 |
|
(6.3 |
)% |
|
$ |
658.4 |
|
$ |
624.3 |
|
5.5 |
% |
Adjusted Segment EBITDA |
$ |
38.4 |
|
$ |
41.0 |
|
(6.3 |
)% |
|
$ |
192.3 |
|
$ |
159.1 |
|
20.9 |
% |
Adjusted Segment EBITDA Margin |
|
26.1 |
% |
|
26.1 |
% |
|
|
|
29.2 |
% |
|
25.5 |
% |
|
- Sales decreased 6.3% versus the prior-year period. Excluding the impact of foreign exchange translation and a divested business, sales decreased 7.5%, driven by a sharp decline in commercial vehicle OEM and softness in general industrial, commercial aerospace, pharma and commercial vehicle aftermarket, partially offset by strategic pricing initiatives and continued strength in nuclear energy.
- Adjusted segment EBITDA decreased 6.3% versus the prior-year period. A decline in volume was the main driver of the decrease, offset in part by strategic pricing initiatives and cost mitigation activities. Excluding the impact of foreign exchange translation the divestiture, adjusted segment EBITDA decreased 7.9% compared to the prior-year period.
Advanced Surface Technologies
- Leading edge precision manufacturing, coatings, innovative optical solutions and cleaning and refurbishment solutions -
|
Quarters Ended |
|
Years Ended |
||||||||||||||
(Amounts in millions except percentages) |
2023 |
2022 |
Change |
|
2023 |
2022 |
Change |
||||||||||
Sales |
$ |
102.1 |
|
$ |
115.4 |
|
(11.5 |
)% |
|
$ |
401.2 |
|
$ |
476.1 |
|
(15.7 |
)% |
Adjusted Segment EBITDA |
$ |
22.9 |
|
$ |
28.9 |
|
(20.8 |
)% |
|
$ |
95.5 |
|
$ |
141.5 |
|
(32.5 |
)% |
Adjusted Segment EBITDA Margin |
|
22.4 |
% |
|
25.0 |
% |
|
|
|
23.8 |
% |
|
29.7 |
% |
|
- Sales decreased 11.5% versus the prior-year period driven primarily by continued weakness in semiconductor capital equipment spending. Excluding the impact of foreign exchange translation, sales decreased 11.3% versus the prior-year period.
- Adjusted segment EBITDA decreased 20.8% versus the prior-year period. Excluding the impact of foreign exchange translation, adjusted segment EBITDA decreased 20.4%, driven primarily by the volume decline, mix, material cost increases and operating costs related to growth investments, offset in part by cost mitigation activities and pricing actions.
Full Year 2023 Consolidated Results
Sales of
Corporate expenses for 2023 of
Income from continuing operations attributable to
Adjusted EBITDA* of
Balance Sheet, Cash Flow and Capital Allocation
The company generated
Enpro ended the fourth quarter with cash of
On
Quarterly Dividend
On
2024 Guidance
The company expects 2024 revenue growth to be in the low to mid-single digit range, adjusted EBITDA* to be in the range of
Conference Call, Webcast Information, and Presentations
Enpro will hold a conference call today,
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. Expenses not directly attributable to the segments, corporate expenses, net interest expense, gains/losses related to the sale of assets, and income taxes are not included in the computation of adjusted segment EBITDA. Under
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 attributable to
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
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 subsequent to
About Enpro
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. Headquartered in
APPENDICES
Consolidated Financial Information and Reconciliations
|
|||||||||||||
Consolidated Statements of Operations (Unaudited) |
|||||||||||||
For the Quarters and Years Ended |
|||||||||||||
(In Millions, Except Per Share Data) |
|||||||||||||
|
Quarters Ended |
|
Years Ended |
||||||||||
|
|
|
|
|
|
||||||||
|
2023 |
2022 |
|
2023 |
2022 |
||||||||
Net sales |
$ |
249.1 |
|
$ |
271.9 |
|
|
$ |
1,059.3 |
|
$ |
1,099.2 |
|
Cost of sales |
|
152.8 |
|
|
166.4 |
|
|
|
632.5 |
|
|
675.9 |
|
Gross profit |
|
96.3 |
|
|
105.5 |
|
|
|
426.8 |
|
|
423.3 |
|
Operating expenses: |
|
|
|
|
|
||||||||
Selling, general and administrative |
|
73.9 |
|
|
77.7 |
|
|
|
284.2 |
|
|
282.8 |
|
|
|
— |
|
|
65.2 |
|
|
|
60.8 |
|
|
65.2 |
|
Other |
|
1.9 |
|
|
0.8 |
|
|
|
5.0 |
|
|
3.1 |
|
Total operating expenses |
|
75.8 |
|
|
143.7 |
|
|
|
350.0 |
|
|
351.1 |
|
Operating income (loss) |
|
20.5 |
|
|
(38.2 |
) |
|
|
76.8 |
|
|
72.2 |
|
Interest expense |
|
(10.1 |
) |
|
(11.4 |
) |
|
|
(45.0 |
) |
|
(35.6 |
) |
Interest income |
|
3.6 |
|
|
1.4 |
|
|
|
14.9 |
|
|
1.7 |
|
Other expense |
|
(4.7 |
) |
|
(8.3 |
) |
|
|
(9.0 |
) |
|
(10.0 |
) |
Income (loss) from continuing operations before income taxes |
|
9.3 |
|
|
(56.5 |
) |
|
|
37.7 |
|
|
28.3 |
|
Income tax expense |
|
(13.8 |
) |
|
(4.6 |
) |
|
|
(30.8 |
) |
|
(24.4 |
) |
Income (loss) from continuing operations |
|
(4.5 |
) |
|
(61.1 |
) |
|
|
6.9 |
|
|
3.9 |
|
Income from discontinued operations, including gain on sale, net of taxes |
|
— |
|
|
184.5 |
|
|
|
11.4 |
|
|
198.4 |
|
Net income (loss) |
|
(4.5 |
) |
|
123.4 |
|
|
|
18.3 |
|
|
202.3 |
|
Less: net income (loss) attributable to redeemable non-controlling interests |
|
0.4 |
|
|
(3.6 |
) |
|
|
(3.9 |
) |
|
(2.8 |
) |
Net income (loss) attributable to |
$ |
(4.9 |
) |
$ |
127.0 |
|
|
$ |
22.2 |
|
$ |
205.1 |
|
|
|
|
|
|
|
||||||||
Income (loss) attributable to |
|
|
|
|
|
||||||||
Income (loss) from continuing operations, net of tax |
$ |
(4.9 |
) |
$ |
(57.5 |
) |
|
$ |
10.8 |
|
$ |
6.7 |
|
Income from discontinued operations, net of tax |
|
— |
|
|
184.5 |
|
|
|
11.4 |
|
|
198.4 |
|
Net income (loss) attributable to |
$ |
(4.9 |
) |
$ |
127.0 |
|
|
$ |
22.2 |
|
$ |
205.1 |
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) per share attributable to |
|
|
|
|
|
||||||||
Continuing operations |
$ |
(0.23 |
) |
$ |
(2.76 |
) |
|
$ |
0.52 |
|
$ |
0.32 |
|
Discontinued operations |
|
— |
|
|
8.87 |
|
|
|
0.54 |
|
|
9.54 |
|
Basic earnings (loss) per share |
$ |
(0.23 |
) |
$ |
6.11 |
|
|
$ |
1.06 |
|
$ |
9.86 |
|
Average common shares outstanding |
|
20.9 |
|
|
20.8 |
|
|
|
20.9 |
|
|
20.8 |
|
|
|
|
|
|
|
||||||||
Diluted earnings (loss) per share attributable to |
|
|
|
|
|
||||||||
Continuing operations |
$ |
(0.23 |
) |
$ |
(2.76 |
) |
|
$ |
0.51 |
|
$ |
0.32 |
|
Discontinued operations |
|
— |
|
|
8.87 |
|
|
|
0.54 |
|
|
9.51 |
|
Diluted earnings (loss) per share |
$ |
(0.23 |
) |
$ |
6.11 |
|
|
$ |
1.05 |
|
$ |
9.83 |
|
Average common shares outstanding |
|
21.0 |
|
|
20.9 |
|
|
|
21.0 |
|
|
20.9 |
|
|
||||||
Consolidated Statements of Cash Flows (Unaudited) |
||||||
For the Years Ended |
||||||
(In Millions) |
||||||
|
2023 |
2022 |
||||
Operating activities of continuing operations |
|
|
||||
Net income |
$ |
18.3 |
|
$ |
202.3 |
|
Adjustments to reconcile net income to net cash provided by operating activities of continuing operations: |
|
|
||||
Income from discontinued operations, net of taxes |
|
(11.4 |
) |
|
(198.4 |
) |
Taxes paid related to sale of discontinued operations |
|
(3.3 |
) |
|
(25.8 |
) |
Depreciation |
|
24.5 |
|
|
25.5 |
|
Amortization |
|
70.0 |
|
|
77.6 |
|
|
|
60.8 |
|
|
65.2 |
|
Loss (gain) on sale of businesses |
|
(0.1 |
) |
|
0.6 |
|
Deferred income taxes |
|
(7.7 |
) |
|
(14.0 |
) |
Stock-based compensation |
|
9.8 |
|
|
6.5 |
|
Other non-cash adjustments |
|
4.7 |
|
|
6.2 |
|
Change in assets and liabilities, net of effects of acquisitions and divestitures of businesses: |
|
|
||||
Accounts receivable, net |
|
21.6 |
|
|
(0.1 |
) |
Inventories |
|
10.3 |
|
|
(18.0 |
) |
Accounts payable |
|
(5.2 |
) |
|
1.5 |
|
Other current assets and liabilities |
|
18.4 |
|
|
(37.1 |
) |
Other non-current assets and liabilities |
|
(2.3 |
) |
|
14.1 |
|
Net cash provided by operating activities of continuing operations |
|
208.4 |
|
|
106.1 |
|
Investing activities of continuing operations |
|
|
||||
Purchases of property, plant and equipment |
|
(33.9 |
) |
|
(29.4 |
) |
Proceeds from sale of businesses, net of cash sold |
|
25.9 |
|
|
301.9 |
|
Acquisitions, net of cash acquired |
|
— |
|
|
(31.2 |
) |
Receipts from settlements of derivative contracts |
|
— |
|
|
27.4 |
|
Purchase of short-term investments |
|
(35.8 |
) |
|
— |
|
Redemption of short-term investments |
|
35.8 |
|
|
— |
|
Other |
|
0.6 |
|
|
(0.1 |
) |
Net cash provided by (used in) investing activities of continuing operations |
|
(7.4 |
) |
|
268.6 |
|
Financing activities of continuing operations |
|
|
||||
Proceeds from debt |
|
— |
|
|
61.0 |
|
Repayments of debt |
|
(145.1 |
) |
|
(398.0 |
) |
Dividends paid |
|
(24.3 |
) |
|
(23.4 |
) |
Other |
|
(1.5 |
) |
|
(7.6 |
) |
Net cash used in financing activities of continuing operations |
|
(170.9 |
) |
|
(368.0 |
) |
Cash flows of discontinued operations |
|
|
||||
Operating cash flows |
|
(0.6 |
) |
|
21.3 |
|
Financing cash flows |
|
— |
|
|
(5.1 |
) |
Net cash provided by (used in) discontinued operations |
|
(0.6 |
) |
|
16.2 |
|
Effect of exchange rate changes on cash and cash equivalents |
|
5.9 |
|
|
(26.6 |
) |
Net increase in cash and cash equivalents |
|
35.4 |
|
|
(3.7 |
) |
Cash and cash equivalents at beginning of period |
|
334.4 |
|
|
338.1 |
|
Cash and cash equivalents at end of period |
$ |
369.8 |
|
$ |
334.4 |
|
Supplemental disclosures of cash flow information: |
|
|
||||
Cash paid during the period for: |
|
|
||||
Interest, net |
$ |
43.3 |
|
$ |
31.5 |
|
Income taxes, net |
$ |
17.2 |
|
$ |
80.8 |
|
|
||||||
Consolidated Balance Sheets (Unaudited) |
||||||
As of |
||||||
(In Millions) |
||||||
|
2023 |
2022 |
||||
Current assets |
|
|
||||
Cash and cash equivalents |
$ |
369.8 |
|
$ |
334.4 |
|
Accounts receivable, net |
|
116.7 |
|
|
137.1 |
|
Inventories |
|
142.6 |
|
|
151.9 |
|
Other current assets |
|
21.2 |
|
|
44.9 |
|
Current assets of discontinued operations |
|
— |
|
|
15.9 |
|
Total current assets |
|
650.3 |
|
|
684.2 |
|
Property, plant and equipment, net |
|
193.8 |
|
|
185.2 |
|
|
|
808.4 |
|
|
863.8 |
|
Other intangible assets |
|
733.5 |
|
|
799.8 |
|
Other assets |
|
113.5 |
|
|
114.8 |
|
Total assets |
$ |
2,499.5 |
|
$ |
2,647.8 |
|
|
|
|
||||
Current liabilities |
|
|
||||
Current maturities of long-term debt |
$ |
8.1 |
|
$ |
15.6 |
|
Accounts payable |
|
68.7 |
|
|
73.4 |
|
Accrued expenses |
|
119.6 |
|
|
120.2 |
|
Current liabilities of discontinued operations |
|
— |
|
|
2.3 |
|
Total current liabilities |
|
196.4 |
|
|
211.5 |
|
Long-term debt |
|
638.7 |
|
|
775.1 |
|
Deferred taxes and non-current income taxes payable |
|
120.7 |
|
|
136.5 |
|
Other liabilities |
|
116.1 |
|
|
111.7 |
|
Total liabilities |
|
1,071.9 |
|
|
1,234.8 |
|
|
|
|
||||
Redeemable non-controlling interests |
|
17.9 |
|
|
17.9 |
|
|
|
|
||||
Shareholders’ equity |
|
|
||||
Common stock |
|
0.2 |
|
|
0.2 |
|
Additional paid-in capital |
|
304.9 |
|
|
299.2 |
|
Retained earnings |
|
1,128.0 |
|
|
1,130.2 |
|
Accumulated other comprehensive income (loss) |
|
(22.2 |
) |
|
(33.3 |
) |
Common stock held in treasury, at cost |
|
(1.2 |
) |
|
(1.2 |
) |
Total shareholders’ equity |
|
1,409.7 |
|
|
1,395.1 |
|
Total liabilities and equity |
$ |
2,499.5 |
|
$ |
2,647.8 |
|
|
|||||||||||||
Segment Information (Unaudited) |
|||||||||||||
For the Quarters and Years Ended |
|||||||||||||
(Dollars in Millions) |
|||||||||||||
|
|
|
|
|
|
||||||||
Sales |
|
|
|
|
|
||||||||
|
Quarters Ended |
|
Years Ended |
||||||||||
|
|
|
|
||||||||||
|
2023 |
2022 |
|
2023 |
2022 |
||||||||
Sealing Technologies |
$ |
147.0 |
|
$ |
156.9 |
|
|
$ |
658.4 |
|
$ |
624.3 |
|
Advanced Surface Technologies |
|
102.1 |
|
|
115.4 |
|
|
|
401.2 |
|
|
476.1 |
|
|
|
249.1 |
|
|
272.3 |
|
|
|
1,059.6 |
|
|
1,100.4 |
|
Less: intersegment sales |
|
— |
|
|
(0.4 |
) |
|
|
(0.3 |
) |
|
(1.2 |
) |
|
$ |
249.1 |
|
$ |
271.9 |
|
|
$ |
1,059.3 |
|
$ |
1,099.2 |
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations attributable to |
$ |
(4.9 |
) |
$ |
(57.5 |
) |
|
$ |
10.8 |
|
$ |
6.7 |
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
||||||||
Earnings before interest, income taxes, depreciation, |
|
|
|
|
|
||||||||
amortization and other selected items (Adjusted Segment EBITDA) |
|||||||||||||
|
Quarters Ended |
|
Years Ended |
||||||||||
|
|
|
|
||||||||||
|
2023 |
2022 |
|
2023 |
2022 |
||||||||
Sealing Technologies |
$ |
38.4 |
|
$ |
41.0 |
|
|
$ |
192.3 |
|
$ |
159.1 |
|
Advanced Surface Technologies |
|
22.9 |
|
|
28.9 |
|
|
|
95.5 |
|
|
141.5 |
|
|
$ |
61.3 |
|
$ |
69.9 |
|
|
$ |
287.8 |
|
$ |
300.6 |
|
|
|
|
|
|
|
||||||||
Adjusted Segment EBITDA Margin |
|
|
|
|
|
||||||||
|
Quarters Ended |
|
Years Ended |
||||||||||
|
|
|
|
||||||||||
|
2023 |
2022 |
|
2023 |
2022 |
||||||||
Sealing Technologies |
|
26.1 |
% |
|
26.1 |
% |
|
|
29.2 |
% |
|
25.5 |
% |
Advanced Surface Technologies |
|
22.4 |
% |
|
25.0 |
% |
|
|
23.8 |
% |
|
29.7 |
% |
|
|
24.6 |
% |
|
25.7 |
% |
|
|
27.2 |
% |
|
27.3 |
% |
|
|
|
|
|
|
||||||||
Reconciliation of Adjusted Segment EBITDA to Income (Loss) from Continuing Operations Attributable to |
|||||||||||||
|
Quarters Ended |
|
Years Ended |
||||||||||
|
|
|
|
||||||||||
|
2023 |
2022 |
|
2023 |
2022 |
||||||||
Income (loss) from continuing operations attributable to |
$ |
(4.9 |
) |
$ |
(57.5 |
) |
|
$ |
10.8 |
|
$ |
6.7 |
|
Plus: net income (loss) attributable to redeemable non-controlling interests |
|
0.4 |
|
|
(3.6 |
) |
|
|
(3.9 |
) |
|
(2.8 |
) |
Income (loss) from continuing operations |
|
(4.5 |
) |
|
(61.1 |
) |
|
|
6.9 |
|
|
3.9 |
|
Income tax expense |
|
(13.8 |
) |
|
(4.6 |
) |
|
|
(30.8 |
) |
|
(24.4 |
) |
Income (loss) from continuing operations before income taxes |
|
9.3 |
|
|
(56.5 |
) |
|
|
37.7 |
|
|
28.3 |
|
Acquisition and divestiture expenses |
|
1.1 |
|
|
0.1 |
|
|
|
1.1 |
|
|
0.5 |
|
Non-controlling interest compensation allocation1 |
|
— |
|
|
(0.5 |
) |
|
|
(0.3 |
) |
|
(0.6 |
) |
Amortization of the fair value adjustment to acquisition date inventory |
|
— |
|
|
1.0 |
|
|
|
— |
|
|
13.3 |
|
Restructuring and impairment expense |
|
1.4 |
|
|
0.7 |
|
|
|
4.0 |
|
|
1.9 |
|
Depreciation and amortization expense |
|
23.4 |
|
|
25.1 |
|
|
|
94.3 |
|
|
102.8 |
|
Corporate expenses |
|
14.4 |
|
|
15.6 |
|
|
|
49.5 |
|
|
47.0 |
|
Interest expense, net |
|
6.5 |
|
|
10.0 |
|
|
|
30.1 |
|
|
33.9 |
|
|
|
— |
|
|
65.2 |
|
|
|
60.8 |
|
|
65.2 |
|
Other expense, net |
|
5.2 |
|
|
9.2 |
|
|
|
10.6 |
|
|
8.3 |
|
Adjusted Segment EBITDA |
$ |
61.3 |
|
$ |
69.9 |
|
|
$ |
287.8 |
|
$ |
300.6 |
|
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. Expenses not directly attributable to the segments, corporate expenses, net interest expense, gains/losses related to the sale of assets, 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. |
|
1Non-controlling interest compensation allocation represents compensation expense associated with a portion of the rollover equity from the acquisitions of LeanTeq and Alluxa that was and is subject to reduction for certain types of employment terminations of the LeanTeq and Alluxa sellers and is directly related to the terms of the respective acquisitions. This expense will continue to be recognized as compensation expense over the term of the put and call options associated with the acquisitions unless certain employment terminations have occurred. The LeanTeq non-controlling interests were acquired by Enpro in |
|
||||||
Adjusted Segment EBITDA Reconciling Items by Segment (Unaudited) |
||||||
For the Quarters and Years Ended |
||||||
(In Millions) |
||||||
|
Quarter Ended |
|||||
|
Sealing Technologies |
Advanced Surface
|
Total Segments |
|||
Acquisition and divestiture expenses |
$ |
1.1 |
$ |
— |
$ |
1.1 |
Restructuring and impairment expense |
$ |
1.4 |
$ |
— |
$ |
1.4 |
Depreciation and amortization expense |
$ |
6.2 |
$ |
17.2 |
$ |
23.4 |
|
Quarter Ended |
|||||||
|
Sealing Technologies |
Advanced Surface Technologies |
Total Segments |
|||||
Acquisition and divestiture expenses |
$ |
— |
$ |
0.1 |
|
$ |
0.1 |
|
Non-controlling interest compensation allocation1 |
$ |
— |
$ |
(0.5 |
) |
$ |
(0.5 |
) |
Amortization of the fair value adjustment to acquisition date inventory |
$ |
— |
$ |
1.0 |
|
$ |
1.0 |
|
Restructuring and impairment expense |
$ |
0.1 |
$ |
0.6 |
|
$ |
0.7 |
|
Depreciation and amortization expense |
$ |
6.3 |
$ |
18.8 |
|
$ |
25.1 |
|
|
Year Ended |
|||||||
|
Sealing Technologies |
Advanced Surface Technologies |
Total Segments |
|||||
Acquisition and divestiture expenses |
$ |
1.1 |
$ |
— |
|
$ |
1.1 |
|
Non-controlling interest compensation allocation1 |
$ |
— |
$ |
(0.3 |
) |
$ |
(0.3 |
) |
Restructuring and impairment expense |
$ |
3.0 |
$ |
1.0 |
|
$ |
4.0 |
|
Depreciation and amortization expense |
$ |
25.1 |
$ |
69.2 |
|
$ |
94.3 |
|
|
Year Ended |
|||||||
|
Sealing Technologies |
Advanced Surface Technologies |
Total Segments |
|||||
Acquisition and divestiture expenses |
$ |
— |
$ |
0.5 |
|
$ |
0.5 |
|
Non-controlling interest compensation allocation1 |
$ |
— |
$ |
(0.6 |
) |
$ |
(0.6 |
) |
Amortization of the fair value adjustment to acquisition date inventory |
$ |
— |
$ |
13.3 |
|
$ |
13.3 |
|
Restructuring and impairment expense |
$ |
0.6 |
$ |
1.3 |
|
$ |
1.9 |
|
Depreciation and amortization expense |
$ |
26.2 |
$ |
76.6 |
|
$ |
102.8 |
|
1Non-controlling interest compensation allocation represents compensation expense associated with a portion of the rollover equity from the acquisitions of LeanTeq and Alluxa that was and is subject to reduction for certain types of employment terminations of the LeanTeq and Alluxa sellers and is directly related to the terms of the respective acquisitions. This expense will continue to be recognized as compensation expense over the term of the put and call options associated with the acquisitions unless certain employment terminations have occurred. The LeanTeq non-controlling interests were acquired by Enpro in |
|
|||||||||||||||
Reconciliation of Income (Loss) from Continuing Operations Attributable to |
|||||||||||||||
For the Quarters and Years Ended |
|||||||||||||||
(In Millions, Except Per Share Data) |
|||||||||||||||
|
Quarters Ended |
||||||||||||||
|
2023 |
|
2022 |
||||||||||||
|
$ |
Average common shares outstanding, diluted |
Per Share |
|
$ |
Average common shares outstanding, diluted |
Per Share |
||||||||
Income (loss) from continuing operations attributable to |
$ |
(4.9 |
) |
21.0 |
$ |
(0.23 |
) |
|
$ |
(57.5 |
) |
20.9 |
$ |
(2.76 |
) |
Net income (loss) from redeemable non-controlling interests |
|
0.4 |
|
|
|
|
|
(3.6 |
) |
|
|
||||
Income tax expense |
|
13.8 |
|
|
|
|
|
4.6 |
|
|
|
||||
Income (loss) from continuing operations before income taxes |
|
9.3 |
|
|
|
|
|
(56.5 |
) |
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Adjustments from selling, general, and administrative: |
|
|
|
|
|
|
|
||||||||
Acquisition and divestiture expenses |
|
1.1 |
|
|
|
|
|
0.1 |
|
|
|
||||
Non-controlling interest compensation allocations1 |
|
— |
|
|
|
|
|
(0.5 |
) |
|
|
||||
Amortization of acquisition-related intangible assets |
|
16.8 |
|
|
|
|
|
18.5 |
|
|
|
||||
Adjustments from other operating expense and cost of sales: |
|
|
|
|
|
|
|
||||||||
Restructuring and impairment expense |
|
1.9 |
|
|
|
|
|
0.7 |
|
|
|
||||
Amortization of the fair value adjustment to acquisition date inventory |
|
— |
|
|
|
|
|
1.0 |
|
|
|
||||
Adjustments from other non-operating expense: |
|
|
|
|
|
|
|
||||||||
Environmental reserve adjustment |
|
2.5 |
|
|
|
|
|
5.3 |
|
|
|
||||
Costs associated with previously disposed businesses |
|
0.9 |
|
|
|
|
|
(0.6 |
) |
|
|
||||
Net loss on sale of businesses |
|
— |
|
|
|
|
|
0.4 |
|
|
|
||||
Pension expense (income) (non-service cost) |
|
0.4 |
|
|
|
|
|
(1.5 |
) |
|
|
||||
Tax indemnification asset 2 |
|
— |
|
|
|
|
|
0.9 |
|
|
|
||||
Alluxa goodwill impairment |
|
— |
|
|
|
|
|
60.6 |
|
|
|
||||
Foreign exchange losses related to the divestiture of a discontinued operation3 |
|
0.7 |
|
|
|
|
|
3.8 |
|
|
|
||||
Other adjustments: |
|
|
|
|
|
|
|
||||||||
Other |
|
0.2 |
|
|
|
|
|
— |
|
|
|
||||
Adjusted income from continuing operations before income taxes |
|
33.8 |
|
|
|
|
|
32.2 |
|
|
|
||||
Adjusted income tax expense |
|
(8.4 |
) |
|
|
|
|
(8.7 |
) |
|
|
||||
Net loss (income) from redeemable non-controlling interests |
|
(0.4 |
) |
|
|
|
|
3.6 |
|
|
|
||||
Adjusted income from continuing operations attributable to |
$ |
25.0 |
|
21.0 |
$ |
1.194 |
|
$ |
27.1 |
|
20.9 |
$ |
1.304 |
|
|
Years Ended |
||||||||||||
|
2023 |
2022 |
|||||||||||
|
$ |
Average common shares outstanding, diluted |
Per Share |
$ |
Average common shares outstanding, diluted |
Per Share |
|||||||
Income from continuing operations attributable to |
$ |
10.8 |
|
21.0 |
$ |
0.51 |
$ |
6.7 |
|
20.9 |
$ |
0.32 |
|
Net loss from redeemable non-controlling interests |
|
(3.9 |
) |
|
|
|
(2.8 |
) |
|
|
|||
Income tax expense |
|
30.8 |
|
|
|
|
24.4 |
|
|
|
|||
Income from continuing operations before income taxes |
|
37.7 |
|
|
|
|
28.3 |
|
|
|
|||
|
|
|
|
|
|
|
|||||||
Adjustments from selling, general, and administrative: |
|
|
|
|
|
|
|||||||
Acquisition and divestiture expenses |
|
1.1 |
|
|
|
|
1.2 |
|
|
|
|||
Non-controlling interest compensation allocations1 |
|
(0.3 |
) |
|
|
|
(0.7 |
) |
|
|
|||
Amortization of acquisition-related intangible assets |
|
68.4 |
|
|
|
|
74.8 |
|
|
|
|||
Adjustments from other operating expense and cost of sales: |
|
|
|
|
|
|
|||||||
Restructuring and impairment expense |
|
5.0 |
|
|
|
|
2.9 |
|
|
|
|||
Amortization of the fair value adjustment to acquisition date inventory |
|
— |
|
|
|
|
13.1 |
|
|
|
|||
Adjustments from other non-operating expense: |
|
|
|
|
|
|
|||||||
Asbestos receivable adjustment |
|
— |
|
|
|
|
2.8 |
|
|
|
|||
Environmental reserve adjustment |
|
2.9 |
|
|
|
|
5.1 |
|
|
|
|||
Costs associated with previously disposed businesses |
|
1.7 |
|
|
|
|
0.3 |
|
|
|
|||
Net loss on sale of businesses |
|
— |
|
|
|
|
0.6 |
|
|
|
|||
Pension expense (income) (non-service cost) |
|
1.5 |
|
|
|
|
(3.6 |
) |
|
|
|||
Tax indemnification asset 2 |
|
— |
|
|
|
|
0.9 |
|
|
|
|||
|
|
56.5 |
|
|
|
|
60.6 |
|
|
|
|||
Foreign exchange losses related to the divestiture of a discontinued operation3 |
|
2.2 |
|
|
|
|
3.8 |
|
|
|
|||
Other adjustments: |
|
|
|
|
|
|
|||||||
Other |
|
0.8 |
|
|
|
|
0.2 |
|
|
|
|||
Adjusted income from continuing operations before income taxes |
|
177.5 |
|
|
|
|
190.3 |
|
|
|
|||
Adjusted income tax expense |
|
(44.4 |
) |
|
|
|
(51.3 |
) |
|
|
|||
Net loss from redeemable non-controlling interests |
|
3.9 |
|
|
|
|
2.8 |
|
|
|
|||
Adjusted income from continuing operations attributable to |
$ |
137.0 |
|
21.0 |
$ |
6.544 |
$ |
141.8 |
|
20.9 |
$ |
6.794 |
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 attributable to |
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% and 27.0% for 2023 and 2022, respectively. 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 associated with a portion of the rollover equity from the acquisitions of LeanTeq and Alluxa that was and is subject to reduction for certain types of employment terminations of the LeanTeq and Alluxa sellers and is directly related to the terms of the respective acquisitions. This expense will continue to be recognized as compensation expense over the term of the put and call options associated with the acquisitions unless certain employment terminations have occurred. The LeanTeq non-controlling interests were acquired by Enpro in |
2 In connection with the acquisition of Aseptic in 2019, we recognized a liability for uncertain tax positions and a related indemnification asset for the portion of that liability recoverable from the seller. We determined the statute of limitations expired on some of the uncertain tax positions in 2022 and 2021 and, accordingly, removed a portion of the liability and receivable. The release of the related liability was recorded as part of our tax expense for the years ended |
3 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 was denominated in a foreign currency. As a result of this note, we recorded a loss due to the change in exchange rate during |
4 Adjusted diluted earnings per share. |
|
|||||||||||||
Reconciliation of Income (Loss) from Continuing Operations Attributable to |
|||||||||||||
For the Quarters and Years Ended |
|||||||||||||
(In Millions) |
|||||||||||||
|
Quarters Ended |
|
Years Ended |
||||||||||
|
|
|
|
||||||||||
|
2023 |
2022 |
|
2023 |
2022 |
||||||||
Income (loss) from continuing operations attributable to |
$ |
(4.9 |
) |
$ |
(57.5 |
) |
|
$ |
10.8 |
|
$ |
6.7 |
|
Net income (loss) attributable to redeemable non-controlling interests |
|
0.4 |
|
|
(3.6 |
) |
|
|
(3.9 |
) |
|
(2.8 |
) |
Income (loss) from continuing operations |
|
(4.5 |
) |
|
(61.1 |
) |
|
|
6.9 |
|
|
3.9 |
|
|
|
|
|
|
|
||||||||
Adjustments to arrive at earnings from continuing operations before interest, income taxes, depreciation, amortization, and other selected items (Adjusted EBITDA): |
|
|
|
|
|
||||||||
Interest expense, net |
|
6.5 |
|
|
10.0 |
|
|
|
30.1 |
|
|
33.9 |
|
Income tax expense |
|
13.8 |
|
|
4.6 |
|
|
|
30.8 |
|
|
24.4 |
|
Depreciation and amortization expense |
|
23.4 |
|
|
25.1 |
|
|
|
94.5 |
|
|
103.1 |
|
Restructuring and impairment expense |
|
1.9 |
|
|
0.7 |
|
|
|
5.0 |
|
|
2.9 |
|
Environmental reserve adjustments |
|
2.5 |
|
|
5.3 |
|
|
|
2.9 |
|
|
5.1 |
|
Costs (income) associated with previously disposed businesses |
|
0.9 |
|
|
(0.6 |
) |
|
|
1.7 |
|
|
0.3 |
|
Net loss on sale of businesses |
|
— |
|
|
0.4 |
|
|
|
— |
|
|
0.6 |
|
Acquisition and divestiture expenses |
|
1.1 |
|
|
0.1 |
|
|
|
1.1 |
|
|
1.2 |
|
Pension expense (income) (non-service cost) |
|
0.4 |
|
|
(1.5 |
) |
|
|
1.5 |
|
|
(3.6 |
) |
Non-controlling interest compensation allocation1 |
|
— |
|
|
(0.5 |
) |
|
|
(0.3 |
) |
|
(0.6 |
) |
Asbestos receivable adjustment |
|
— |
|
|
— |
|
|
|
— |
|
|
2.8 |
|
Amortization of the fair value adjustment to acquisition date inventory |
|
— |
|
|
1.0 |
|
|
|
— |
|
|
13.3 |
|
Tax indemnification asset 2 |
|
— |
|
|
0.9 |
|
|
|
— |
|
|
0.9 |
|
|
|
— |
|
|
65.2 |
|
|
|
60.8 |
|
|
65.2 |
|
Foreign exchange losses related to the divestiture of GGB3 |
|
0.7 |
|
|
3.8 |
|
|
|
2.2 |
|
|
3.8 |
|
Other |
|
0.2 |
|
|
— |
|
|
|
0.8 |
|
|
0.2 |
|
Adjusted EBITDA |
$ |
46.9 |
|
$ |
53.4 |
|
|
$ |
238.0 |
|
$ |
257.4 |
|
1 Non-controlling interest compensation allocation represents compensation expense associated with a portion of the rollover equity from the acquisitions of LeanTeq and Alluxa that was and is subject to reduction for certain types of employment terminations of the LeanTeq and Alluxa sellers and is directly related to the terms of the respective acquisitions. This expense will continue to be recognized as compensation expense over the term of the put and call options associated with the acquisitions unless certain employment terminations have occurred. The LeanTeq non-controlling interests were acquired by Enpro in |
|
2 In connection with the acquisition of Aseptic in 2019, we recognized a liability for uncertain tax positions and a related indemnification asset for the portion of that liability recoverable from the seller. We determined the statute of limitations expired on some of the uncertain tax positions in 2021 and, accordingly, removed a portion of the liability and receivable. The release of the related liability was recorded as part of our tax expense for the year ended |
|
3 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 was denominated in a foreign currency. As a result of this note, we recorded a loss due to the change in exchange rate during |
|
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 year ended |
|
|||
Reconciliation of Free Cash Flow (Unaudited) |
|||
(In Millions) |
|||
|
|
||
Free Cash Flow - Year Ended |
|||
Net cash provided by operating activities of continuing operations |
$ |
208.4 |
|
Purchases of property, plant, and equipment |
|
(33.9 |
) |
Free cash flow |
$ |
174.5 |
|
|
|
||
Free Cash Flow - Year Ended |
|||
Net cash provided by operating activities of continuing operations |
$ |
106.1 |
|
Purchases of property, plant, and equipment |
|
(29.4 |
) |
Free cash flow |
$ |
76.7 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240220859597/en/
Investor Contacts:
Executive Vice President and
Chief Financial Officer
Vice President, Investor Relations
704-731-1527
investor.relations@enpro.com
Source: