Slide 1: Third Quarter 2020 Earnings Review
THIRD QUARTER 2020 EARNINGS REVIEW NOVEMBER 3, 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: Q3 2020 Update
Q3 2020 UPDATE Marvin Riley – President & CEO
Slide 4: Q3 2020 Highlights
Q3 2020 HIGHLIGHTS • Sales decreased 10.3% to $268.3M • Adjusted EBITDA* decreased 1.4% to $42.1M; adjusted EBITDA* margin increased 140 bps to 15.7% • Closed the previously announced acquisition of Alluxa, Inc. on October 26 and completed the sale of all assets related to STEMCO’s Motor Wheel® and
Slide 5: Four-Phase Response to Navigate the COVID-19 Pandemic
FOUR-PHASE RESPONSE TO NAVIGATE THE COVID-19 PANDEMIC Our cross-functional COVID-19 Response & Support Team, made up of our global executive leadership team, is working around the clock to manage our business continuity plans and coordinated response THE HEALTH AND SAFETY OF OUR EMPLOYEES, COMMUNITI
Slide 6: EnPro's Strategy: Acquisitions and Divestitures
ENPRO’S STRATEGY 1 Reshaping portfolio to Successful Execution of Portfolio Shaping Actions accelerate growth through Resulting in a More Durable Business Model the addition of niche, high- margin materials science- Transaction Strategic Rationale related businesses with leading technologies and All
Slide 7: Alluxa at a Glance
ALLUXA AT A GLANCE Key Statistics Revenue ($M) 2019 Sales 2019 Sales By Application By Geography A&D, 4% As i a, Founded 2007 Semi , 10% 12% Industrial Europe, Facilities 2 Technology, 22% Li fe Sci ences, 50% Ameri cas,1 33% 68% 2017 2018 2019 2020E 1 Location Santa Rosa, CA 32% of 2019 sales were
Slide 8: Overview of Financial Results
OVERVIEW OF FINANCIAL RESULTS Milt Childress – Executive Vice President & CFO
Slide 9: Q3 2020 Financial Performance
Q3 2020 FINANCIAL PERFORMANCE $ in millions, except per share data Sales Gross Profit & Margin Adj. EBITDA* & Margin* Adj. Diluted EPS* -10.3% +250b ps -1.4% -8.2% $299.0 38 % $268.3 $97.7 $94.5 43 % $42.7 $42.1 $0.73 $0.67 33 % 41 % 28 % 39 % 23 % 37 % 35 % 18 % 35.2% 33 % 13 % 31 % 14.3% 15.7% 32.
Slide 10: Sealing Products – Q3 2020 Financial Performance
SEALING PRODUCTS – Q3 2020 FINANCIAL PERFORMANCE $ in millions Sales Adj. EBITDA* & Margin* 29 % $219.5 $201.8 $45.4 27 % -8.1% +22.7% 25 % $37.0 23 % 22.5% 21 % 19 % 17 % 16.9% 15 % Q3 2019 Q3 2020 Q3 2019 Q3 2020 • Grow th in semiconductor, including the contribution of the LeanTeq acquisition tha
Slide 11: Engineered Products – Q3 2020 Financial Performance
ENGINEERED PRODUCTS – Q3 2020 FINANCIAL PERFORMANCE $ in millions Sales 20 Adj. EBITDA* & Margin* 45 % 18 40 % 85 $81.1 16 $14.8 35 % 80 -16.5% 14 -46.6% 30 % 12 25 % 75 10 $7.9 20 % 8 70 $67.7 15 % 6 18.2% 10 % 4 65 11.7% 5% 2 60 0 0% Q3 2019 Q3 2020 Q3 2019 Q3 2020 • Broad-based end market w eakne
Slide 12: Balance Sheet & Cash Flow
BALANCE SHEET & CASH FLOW Net Leverage Commentary Reported September 30, 2020 ($M) • Strong balance sheet; net debt to adjusted EBITDA* of 0.3x and ample liquidity consisting of $441M cash and $389M 3 available under revolver Credit Facility $0 • No debt coming due until 2024 Senior Notes 1 $346 • P
Slide 13: Pro Forma Bridge (LTM)
PRO FORMA BRIDGE (LTM) $ in millions RESHAPING ACTIONS HAVE SIGNIFICANTLY ENHANCED PROFITABILITY OF T HE PORTFOLIO Sales Adjusted EBITDA* Adjusted EBITDA Margin* -8.8% +1.9% +175b ps $95 $3 1.7% $1,085 $167 16.8% $989 $164 15.1% Reported Net Imp act of Pro Forma Reported Net Imp act of Pro Forma Rep
Slide 14: COVID-19 Scenario Analysis
COVID-19 SCENARIO ANALYSIS ● For the fourth quarter, anticipate year-over-year demand to be solid for both semiconductor and food and pharma, with continued softness in heavy duty truck, general industrial, oil and gas, petrochemical, and aerospace ● For the full year, revised scenario planning rang
Slide 15: Closing Comments
CLOSING COMMENTS Marvin Riley – President & CEO
Slide 16: Closing Comments
CLOSING COMMENTS ENPRO IS A LEADING TECHNOLOGY COMPANY USING MATERIALS SCIENCE TO PUSH THE BOUNDARIES OF THE SEMICONDUCTOR, LIFE SCIENCES, AND OTHER TECHNOLOGY-ENABLED SECTORS ● Leveraging the EnPro Operating System to capture above-market growth, expand margins, and drive cash flow return on invest
Slide 17: Q&A
Q&A
Slide 18: Appendix
APPENDIX
Slide 19: EnPro (NYSE: NPO) | Attractive Portfolio of Businesses
ENPRO (NYSE: NPO) | ATTRACTIVE PORTFOLIO OF BUSINESSES Company Overview Revenue Contribution Headquarters Charlotte, NC Sales by Sales by Segment 4 Sales by Channel5 Sales by Market 4 Manufacturing Facilities 25 primary Geography5 Global Employees ~5,000 5% Customers 50,000+ 10% 3% 5% 3% 25% 5% 25%
Slide 20: Reconciliation of LTM Results
RECONCILIATION OF LTM RESULTS Net income (loss) EnPro Revenue Adjusted EBITDA attributable to EnPro Adjusted EBITDA ($) ($ in millions) ($) Margin % Industries, Inc. Plus: Nine Months Ended September 30, 2020 798 193 120 15.1% Y ear Ended December 31, 2019 1,206 38 169 14.0% Less: Nine Months Ended
Slide 21: 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 22: Consolidated Adjusted EBITDA
CONSOLIDATED ADJUSTED EBITDA 22
Slide 23: Segment Adjusted EBITDA
SEGMENT ADJUSTED EBITDA Segment AEBITDA Quarter Ended Year Ended Quarter Ended March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 December 31, 2019 March 31, 2020 June 30, 2020 Sealing Products $ 32.6 $ 42.4 $ 37.0 $ 42.9 $ 154.9 $ 40.8 $ 41.5 Engineered Products 11.5 15.7 14.8 11.7 5
Slide 24: Consolidated Adjusted Net Income
CONSOLIDATED ADJUSTED NET INCOME (Stated in Millions of Dollars, Except Per Share Data) 24
Slide 25: Adjusted Diluted Earnings Per Share Excluding Amortization of Intangibles
ADJUSTED DILUTED EARNINGS PER SHARE EXCLUDING AMORTIZATION OF INTANGIBLES (Stated in Millions of Dollars, Except Per Share Data) Q3 2020 Q3 2019 Income Shares O/S EPS Income Shares O/S EPS Adjusted income from continuing operations attributable to EnPro Industries, Inc. $ 13.8 20.6 $ 0.67 $ 15.2 20.
Slide 26: Free Cash Flow
FREE CASH FLOW (Stated in Millions of Dollars) 26
Slide 27: Pro Forma Calculation
PRO FORMA CALCULATION (Stated in Millions of Dollars) LTM September 30, 2020 Pro forma EnPro Adjustments Pro Forma Net sales $ 1,085 $ (95) $ 989 Net income (loss) attributable to EnPro Industries, Inc. $ 195 $ 27 $ 222 Adjustments to arrive at earnings before interest, income taxes, depreciation an