Enpro Inc. · NYSE:NPO
Enpro — EnPro Industries — Q4 2019 Earnings Presentation
23 slides from Enpro's earnings presentation, Feb 25, 2020
Slide 1: Fourth Quarter and Full Year 2019 Earnings Review
ENPRO INDUSTRIES FOURTH QUARTER AND FULL YEAR 2019 EARNINGS REVIEW FEBRUARY 25, 2020
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Statements made in the course of this presentation that express a belief, expectation or intention, as well as those 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
Slide 3: Successful Execution of Portfolio Shaping Actions
SUCCESSFUL EXECUTION OF PORTFOLIO SHAPING ACTIONS Fairbanks Morse Brake Shoe Business The Aseptic Group LeanTeq Co., Ltd. Divestiture Divestiture Acquisition Acquisition (Closed Q1 2020) (Closed Q4 2019) (Closed Q3 2019) (Closed Q3 2019) • Produces large medium-speed • Manufactures brake shoes and •
Slide 4: EnPro: Attractive Portfolio of Businesses
ENPRO (NYSE: NPO) | ATTRACTIVE PORTFOLIO OF BUSINESSES COMPANY OVERVIEW 2019 REVENUE CONTRIBUTION Headquarters Charlotte, NC SALES BY SEGMENT SALES BY CHANNEL Manufacturing Facilities 27 primary 25% SEALING PRODUCTS AFTERMARKET Global Employees ~5,000 ENGINEERED PRODUCTS 48% 52% OE Customers 50,000+
Slide 5: Q4 2019 Highlights
Q4 2019 HIGHLIGHTS Marvin Riley – President & Chief Executive Officer
Slide 6: Q4 Highlights
Q4 HIGHLIGHTS Q4 2019 • Positive momentum in aerospace, semiconductor, food and pharma, nuclear, and oil and gas Financial • Q4 2019 segment profit and consolidated adjusted EBITDA* were up 145% and 28%, respectively, Highlights versus the prior year period • Evaluated structural competitiveness of
Slide 7: Overview of Financial Results
OVERVIEW OF FINANCIAL RESULTS Milt Childress – Executive Vice President & CFO
Slide 8: Q4 2019 Financial Performance
Q4 2019 FINANCIAL PERFORMANCE $ in millions Sales Gross Profit & Margin Adjusted EBITDA* & Margin 34.2% 15.1% $98.1 $43.3 $290.7 $286.5 30.9% +330bps 11.7% +27.7% -1.4% $89.7 $33.9 Q4 '18 Q4 '19 Q4 '18 Q4 '19 Q4 '18 Q4 '19 ● Growth in aerospace, semiconductor, ● Benefit from LeanTeq and The Aseptic
Slide 9: Sealing Products – Q4 2019 Financial Performance
SEALING PRODUCTS – Q4 2019 FINANCIAL PERFORMANCE $ in millions Sales Segment Adjusted EBITDA* & Margin $220.8 20.3% $217.2 +1.7% $44.9 +32.8% 15.6% $33.8 Q4 '18 Q4 '19 Q4 '18 Q4 '19 ● Favorable demand in the aerospace, food and pharma, nuclear, ● Improvements in the heavy-duty truck business driven
Slide 10: Engineered Products – Q4 2019 Financial Performance
ENGINEERED PRODUCTS – Q4 2019 FINANCIAL PERFORMANCE $ in millions Sales Segment Adjusted EBITDA* & Margin $74.5 14.5% -10.2% $66.9 +7.8% $9.7 12.1% $9.0 Q4 '18 Q4 '19 Q4 '18 Q4 '19 ● Weakness in the automotive and general industrial ● Increase primarily due to cost reduction initiatives markets impl
Slide 11: Legacy Environmental Update
LEGACY ENVIRONMENTAL UPDATE ● Resolved several discrete environmental matters transferred to EnPro at time of spin-off from Goodrich in 2002: ● Water Valley, Mississippi: ● In Q3 2019, resolved claims brought by 24 private property owners regarding the contamination in Water Valley, Mississippi ● In
Slide 12: Net Debt Summary
NET DEBT SUMMARY Adjustments for Reported December 31, 2019 ($M) FM Proceeds (2) Pro Forma Credit Facility $134 -$134 $0 Net Debt in 2019 Senior Notes(1) $345 $345 • At year end, the company had a cash Term Loan $149 $149 balance of approximately $121M and total borrowings of approximately $629M Cap
Slide 13: 2019 Capital Allocation Overview
2019 CAPITAL ALLOCATION OVERVIEW Use of Cash During 2019, generated $109M of free cash flow from continuing operations compared to $99M in 2018 (1), excluding the benefit in ~$368M 2018 of $78M of net tax proceeds Spent $311M on acquisitions of LeanTeq and The Aseptic Group Acquisitions 84% Invested
Slide 14: Guidance
GUIDANCE Marvin Riley – President & Chief Executive Officer
Slide 15: 2020 Guidance
2020 GUIDANCE 2020 Guidance as of 2/25/20 Adjusted EBITDA* $180M – $190M Adjusted EPS* $2.82 – $3.14 Assumptions: • Anticipate approximately 18-20% of our full-year adjusted EBITDA* in 1Q20 2020 Interest Expense ($ in Millions) • Anticipate impact to adjusted EBITDA* of approximately $3M for 2020 as
Slide 16: Closing Comments
CLOSING COMMENTS Marvin Riley – President & Chief Executive Officer
Slide 17: Successful Execution of Portfolio Shaping Actions
SUCCESSFUL EXECUTION OF PORTFOLIO SHAPING ACTIONS Fairbanks Morse Brake Shoe Business The Aseptic Group LeanTeq Co., Ltd. Divestiture Divestiture Acquisition Acquisition (Closed Q1 2020) (Closed Q4 2019) (Closed Q3 2019) (Closed Q3 2019) • Produces large medium-speed • Manufactures brake shoes and •
Slide 18: Q&A
Q&A
Slide 19: Appendix
APPENDIX
Slide 20: Consolidated Adjusted EBITDA
CONSOLIDATED ADJUSTED EBITDA Reconciliation of Net Income (Loss) to Adjusted EBITDA (Unaudited) For the Quarters and Years Ended December 31, 2019 and 2018 (Stated in Millions of Dollars) Quarters Ended Years Ended December 31, December 31, 2019 2018 2019 2018 Net income (loss) $ 2.8 $ (27.1) $ 38.3
Slide 21: Segment Adjusted EBITDA
SEGMENT ADJUSTED EBITDA Reconciliation of Segment Profit to Adjusted Segment EBITDA (Unaudited) For the Quarters and Years Ended December 31, 2019 and 2018 (Stated in Millions of Dollars) Quarter Ended December 31, 2019 Year Ended December 31, 2019 Sealing Engineered Total Sealing Engineered Total P
Slide 22: Consolidated Adjusted Net Income
CONSOLIDATED ADJUSTED NET INCOME Reconciliation of Net Income (Loss) to Adjusted Net Income from Continuing Operations and Adjusted Diluted Earnings Per Share (Unaudited) (Stated in Millions of Dollars, Except Per Share Data) Quarters Ended December 31, 2019 2018 Average common Average common shares
Slide 23: Consolidated Adjusted Net Income
CONSOLIDATED ADJUSTED NET INCOME Reconciliation of Net Income (Loss) to Adjusted Net Income from Continuing Operations and Adjusted Diluted Earnings Per Share (Unaudited) (Stated in Millions of Dollars, Except Per Share Data) Years Ended December 31, 2019 2018 Average common Average common shares ou