Slide 1: First Quarter 2020 Earnings Review
ENPRO INDUSTRIES FIRST QUARTER 2020 EARNINGS REVIEW MAY 5, 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: Q1 2020 Update
Q1 2020 UPDATE Marvin Riley – President & Chief Executive Officer
Slide 4: Q1 2020 Highlights
Q1 2020 HIGHLIGHTS • Sales decreased ~7% to $282.7M • Adjusted EBITDA* increased ~19% to $40.6M; adjusted EBITDA margin* expanded ~320 bps to 14.4% • Closed divestiture of Fairbanks Morse on January 21, 2020 • Net debt to adjusted EBITDA at March 31, 2020 of 0.6x Q1 2020 • Withdrawing 2020 guidance
Slide 5: Four-Phase Response to Navigate the COVID-19 Pandemic
FOUR-PHASE RESPONSE TO NAVIGATE THE COVID-19 PANDEMIC Our cross-functional COVID-19 Response & Support Team, made up of our global executive leadership team, is working around the clock to manage our business continuity plans and coordinated response THE HEALTH AND SAFETY OF OUR EMPLOYEES, COMMUNITI
Slide 6: EnPro's Strategic Outlook
ENPRO’S STRATEGIC OUTLOOK Reshaping our portfolio towards businesses with compelling margins, leading technology, and high cash flow 1 return on investment in markets with favorable secular tailwinds 2 Increasing aftermarket exposure and recurring revenue opportunities 3 Maintaining a balanced appro
Slide 7: Overview of Financial Results
OVERVIEW OF FINANCIAL RESULTS Milt Childress – Executive Vice President & CFO
Slide 8: Q1 2020 Financial Performance
Q1 2020 FINANCIAL PERFORMANCE $ in millions, except per share data Sales Gross Profit & Margin Adj. EBITDA* & Margin Adj. Diluted EPS* 38% 38% 37% 33% -6.7% $99.5 +90bps +19.4% $40.6 +37.8% $303.0 $282.7 $95.3 36% 28% $0.62 35% $34.0 23% 34% 18% $0.45 33.7% 33% 13% 14.4% 32.8% 32% 11.2% 8% 31% 3% 30
Slide 9: Sealing Products – Q1 2020 Financial Performance
SEALING PRODUCTS – Q1 2020 FINANCIAL PERFORMANCE $ in millions Sales Segment Adjusted EBITDA* & Margin 28% $224.5 26% -3.7% 24% +22.6% $41.3 $216.1 22% 20% $33.7 18% 19.1% 16% 14% 15.0% 12% Q1 2019 Q1 2020 Q1 2019 Q1 2020 • Growth in food and pharma, general industrial, and semiconductor markets • B
Slide 10: Engineered Products – Q1 2020 Financial Performance
ENGINEERED PRODUCTS – Q1 2020 FINANCIAL PERFORMANCE $ in millions Sales Segment Adjusted EBITDA* & Margin 19% $79.5 18% $10.4 17% -14.6% $67.9 16% -25.0% $7.8 15% 14% 13% 13.1% 12% 11.5% 11% 10% 9% Q1 2019 Q1 2020 Q1 2019 Q1 2020 • Weakness in the automotive, general industrial, and petrochemical •
Slide 11: Balance Sheet Strength
BALANCE SHEET STRENGTH NET LEVERAGE DEBT MATURITY SCHEDULE Senior Reported March 31, 2020 ($M) Unsecured Undrawn Notes Revolver Credit Facility $0 $400M Senior Notes(1) $345 $350M Term Loan A $150M Term Loan $149 2020 2021 2022 2023 2024 2025 2026 Capital Lease Obligations $1 COMMENTARY • Completed
Slide 12: COVID-19 Scenario Analysis
COVID-19 SCENARIO ANALYSIS Q1 MARKET EXPOSURE: TOTAL ENPRO SEALING PRODUCTS ENGINEERED PRODUCTS MD/HD Truck MD/HD Truck Automotive 1% 1% 1% General Industrial General Industrial General Industrial 5%4% 5% 5% 6% 3% 5% 24% Semiconductors 6% Semiconductors Oil & Gas 32% 30% 7% Oil & Gas 6% 15% Petroche
Slide 13: Closing Comments
CLOSING COMMENTS Marvin Riley – President & Chief Executive Officer
Slide 14: Closing Comments
CLOSING COMMENTS ● Leadership team is confident in ability to safely and successfully navigate the current environment, taking every opportunity to strengthen our organization ● EnPro is continuing to ensure the health and safety of employees and delivering high levels of service to customers ● Fina
Slide 15: Q&A
Q&A
Slide 16: Appendix
APPENDIX
Slide 17: EnPro (NYSE: NPO) | Attractive Portfolio of Businesses
ENPRO (NYSE: NPO) | ATTRACTIVE PORTFOLIO OF BUSINESSES COMPANY OVERVIEW 2019 REVENUE CONTRIBUTION Headquarters Charlotte, NC SALES BY SEGMENT SALES BY CHANNEL Manufacturing Facilities 27 primary 25% SEALING PRODUCTS AFTERMARKET Global Employees 5,000+ ENGINEERED PRODUCTS 48% 52% OE Customers 50,000+
Slide 18: Reconciliation of LTM Results
RECONCILIATION OF LTM RESULTS EnPro Revenue Adjusted EBITDA Adjusted EBITDA ($ in millions) ($) ($) Margin % Plus: Three Months Ended March 31, 2020 283 41 14.4% Year Ended December 31, 2019 1,206 169 14.0% Less: Three Months Ended March 31, 2019 303 34 11.2% LTM Ended March 31, 2020 1,185 176 14.8%
Slide 19: Consolidated Adjusted EBITDA
CONSOLIDATED ADJUSTED EBITDA Reconciliation of Net Income (Loss) to Adjusted EBITDA (Unaudited) For the Years Ended December 31, 2019 and 2018 (Stated in Millions of Dollars) Years Ended December 31, 2019 2018 Net income (loss) $ 38.3 $ 19.6 Adjustments to arrive at earnings before interest, income
Slide 20: Consolidated Adjusted EBITDA
CONSOLIDATED ADJUSTED EBITDA Reconciliation of Net Income Attributable to EnPro Industries, Inc. to Adjusted EBITDA (Unaudited) For the Three Months Ended March 31, 2020 and 2019 (Stated in Millions of Dollars) 2020 2019 Net income attributable to EnPro Industries, Inc. $ 218.7 $ 13.1 Adjustments to
Slide 21: Segment Adjusted EBITDA
SEGMENT ADJUSTED EBITDA Reconciliation of Segment Profit to Adjusted Segment EBITDA (Unaudited) For the Quarters ended March 31, 2020 and 2019 and Year Ended December 31, 2019 (Stated in Millions of Dollars) Three Months Ended March 31, 2020 Year Ended December 31, 2019 Sealing Engineered Total Seal
Slide 22: Consolidated Adjusted Net Income
CONSOLIDATED ADJUSTED NET INCOME Reconciliation of Income from Continuing Operations Attributable to EnPro Industries, Inc. to Adjusted Income from Continuing Operations Attributable to EnPro Industries, Inc. and Adjusted Diluted Earnings Per Share (Unaudited) For the Three Months Ended March 31, 20
Slide 23: Free Cash Flow
FREE CASH FLOW March 31, 2020 ($M) Q12020 Q12019 Net Cash Provided by (Used in) Operating Activities of 0.3 (1.3) Continuing Operations Purchases of Property, Plant and Equipment (5.2) (4.1) Free Cash Flow (4.9) (5.4) Excluding: Environmental Payments 15.5 0.9 Excluding: Fairbanks Morse Related Rece