EnPro Industries Reports Results for the Third Quarter and First Nine Months of 2015 and Announces New Share Repurchase Program
EnPro Industries, Inc. (NYSE: NPO):
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Consolidated Financial Highlights
(Amounts in millions except per share data and percentages)
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Consolidated Financial Results
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Quarter Ended September 30
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Nine Months Ended September 30
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2015
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2014
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% Change
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2015
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2014
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% Change
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Net Sales
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$
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306.6
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$
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302.6
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1
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%
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$
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882.5
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$
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902.9
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-2
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%
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Segment Profit
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$
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33.2
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$
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38.6
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-14
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%
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$
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86.7
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$
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102.8
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-16
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%
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Segment Margin
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10.8
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%
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12.8
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%
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9.8
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%
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11.4
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%
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Net Income (loss)
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$
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11.4
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$
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8.6
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33
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%
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$
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(27.5
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$
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18.2
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-251
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%
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Diluted EPS
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$
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0.51
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$
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0.33
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$
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(1.21
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)
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$
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0.71
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Adjusted EBITDA*
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$
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41.8
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$
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43.1
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-3
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%
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$
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113.6
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$
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115.0
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-1
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%
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*See attached schedules for adjustments and reconciliations to GAAP
numbers
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Normalized Consolidated Results
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Quarter Ended September 30
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Nine Months Ended September 30
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2015
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2014
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% Change
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2015
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2014
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% Change
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Normalized Net Sales**
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$
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283.7
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$
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294.9
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-4
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%
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$
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865.5
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$
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878.2
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-1
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%
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Normalized Segment Profit**
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$
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33.3
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$
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37.8
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-12
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%
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$
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96.7
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$
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99.5
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-3
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%
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Normalized Segment Profit Margin**
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11.7
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%
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12.8
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%
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11.2
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%
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11.3
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%
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**Normalized data adjusted for FX, acquisitions and divestitures,
acquisition expenses, restructuring and EDF loss provision as set
forth in the attached schedules
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Pro Forma Financial Information
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Quarter Ended September 30
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Nine Months Ended September 30
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including deconsolidated GST *
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2015
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2014
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% Change
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2015
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2014
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% Change
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Pro Forma Net Sales
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$
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346.5
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$
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348.9
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-1
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%
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$
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1,009.5
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$
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1,043.2
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-3
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%
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Pro Forma Net Income
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$
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19.8
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$
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18.7
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6
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%
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$
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1.5
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$
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51.7
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-97
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%
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Pro Forma Adjusted EBITDA
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$
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53.0
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$
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55.7
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-5
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%
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$
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148.2
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$
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156.3
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-5
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%
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*See attached pro forma schedules
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-
Net sales for the third quarter of 2015 decreased by 4% from the
third quarter of 2014 after adjusting for foreign exchange
translation, acquisitions and a divestiture.
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Segment profit for the third quarter decreased by 12% after
adjusting for foreign exchange translation, acquisitions and
divestitures and their related expenses, and restructuring.
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Diluted EPS increased to $0.51 in the third quarter of 2015 from
$0.33 in the third quarter of 2014.
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Adjusted EBITDA was $41.8 million in the third quarter and $113.6
million for the first nine months of 2015 compared to $43.1 million in
the third quarter and $115.0 million for the first nine months of 2014.
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Third quarter pro forma sales† (which includes the sales of
deconsolidated GST) declined to $346.5 million, or 1%, from the third
quarter of 2014. Pro forma Adjusted EBITDA† declined 5% to $53.0
million compared to the third quarter of 2014.
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For the first nine months of 2015, pro forma sales decreased 3% to
$1,009.5 million from the first nine months of 2014. Pro forma
Adjusted EBITDA† of $148.2 million decreased 5% from the first nine
months of 2014.
† (Please refer to Pro Forma Condensed Consolidated Financial
Statements attached)
EnPro Industries, Inc. (NYSE: NPO) today reported consolidated sales of
$306.6 million in the third quarter of 2015, a $4.0 million, or 1%,
increase from the third quarter of 2014. On a normalized basis, which
excludes the effect of foreign exchange translation and the net impact
of acquisitions and a divestiture, sales declined 4%. On a normalized
basis, Power Systems segment sales were 6% higher than the third quarter
of 2014 but this was more than offset by sales declines of 4% in Sealing
Products and 8% in the Engineered Products segment.
Segment profit margin of 10.8% in the third quarter of 2015 was down
from 12.8% in the third quarter of 2014 primarily as a result of lower
volumes in the Sealing Products and Engineered Products segments and the
expected low-contribution impact from the truck parts acquisitions in
the Sealing Products segment. On a normalized comparison, segment profit
margins for the quarter were 11.7% compared to 12.8% in the third
quarter of last year.
EnPro reported net income in the third quarter of 2015 of $11.4 million,
or $0.51 a share, compared to net income of $8.6 million, or $0.33 a
share, in the third quarter of 2014. Contributing to the improved net
income were lower corporate expenses of $3.8 million, lower other
expense of $3.0 million, primarily related to a $4.0 million loss on the
purchase of convertible debentures that occurred in the third quarter of
last year, and $3.7 million lower income tax expense resulting from
discrete items.
Consolidated earnings before interest, income taxes, depreciation and
amortization and other selected items detailed in the attached financial
schedules (adjusted EBITDA), were $41.8 million in the third quarter of
2015, a 3% decrease from the third quarter of 2014.
The company’s average diluted share count in the third quarter of 2015
decreased by 4.0 million shares to 22.1 million shares, down 15% from
the same period a year ago. The decrease primarily reflects the net
effect of the cash purchase of convertible debentures in September,
2014, as well as the unwinding of the hedge related to the original
issue of convertible debentures and purchases of 1.2 million common
shares occurring in the first four months of 2015.
Nine Months Results
Sales for the first nine months of 2015 were $882.5 million, a 2%
decrease from 2014. Excluding foreign exchange translation and the net
impact of acquisitions and dispositions, sales were 1% lower than the
first nine months of 2014, as an increase in Power Systems was more than
offset by a decline in the Engineered Products segment.
Segment profit margin of 9.8% in the first nine months of 2015 was down
from 11.4% in the first nine months of 2014, primarily as a result of
lower volumes in the Sealing Products and Engineered Products segments,
higher restructuring and integration expenses and higher benefits costs
partially offset by a favorable sales mix in Sealing Products, favorable
pricing in all segments, lower material costs and lower incentive
compensation expenses. On a normalized comparison, segment profit
margins of 11.2% were essentially level from the first nine months of
2014.
Net loss for the first nine months of 2015 was $27.5 million, or $1.21 a
share, compared to net income of $18.2 million, or $0.71 a share, in
2014. The year-to-date net loss is a result of the $45.8 million after
tax goodwill impairment charge related to CPI that was recorded by the
company in the second quarter of this year. Adjusted EBITDA for the
first nine months was $113.6 million compared to adjusted EBITDA of
$115.0 million in the first nine months of 2014. Adjusted EBITDA is
calculated before selected items, including the goodwill and intangible
asset impairment charge, interest due to GST, a loss on the exchange and
repurchase of convertible debentures and other items detailed in the
attached financial schedules.
Sealing Products Segment
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Quarter Ended
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Nine Months Ended
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($ Millions)
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9/30/2015
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9/30/2014
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Change
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9/30/2015
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9/30/2014
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Change
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Sales
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$
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186.3
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$
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168.9
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10
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%
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$
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520.2
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$
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499.3
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4
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%
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Segment Profit
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$
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22.5
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$
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23.0
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-2
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%
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$
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61.7
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$
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62.9
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-2
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%
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Segment Margin
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12.1
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%
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13.6
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%
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11.9
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%
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12.6
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%
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Normalized Net Sales
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$
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154.8
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$
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161.2
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-4
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%
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$
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474.6
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$
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474.6
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0
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%
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Normalized Segment Profit
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$
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21.9
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$
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22.2
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-1
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%
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$
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62.3
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$
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59.5
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5
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%
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Normalized Segment Margin
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14.1
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%
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13.8
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%
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13.1
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%
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12.5
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%
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Adjusted EBITDA*
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$
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32.1
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$
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31.2
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3
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%
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$
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90.6
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$
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87.3
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4
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%
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Adjusted EBITDA Margin **
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17.2
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%
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18.5
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%
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17.4
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%
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17.5
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%
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*See attached schedules for adjustments.
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** Adjusted EBITDA as a percentage of sales
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In the third quarter of 2015, sales in the Sealing Products segment
increased 10% from the third quarter of 2014. Acquisitions, net of a
divestiture, contributed approximately $29.0 million of sales in the
quarter, partially offset by lower volumes and unfavorable foreign
exchange translation. Softer demand from oil and gas, truck parts,
semiconductor and general industrial markets were partially offset by
stronger nuclear market and aerospace sales.
The segment’s profits decreased by 2% and segment profit margins
declined to 12.1% from 13.6% in the third quarter of 2015. On a
normalized basis excluding the impact of foreign exchange translation,
restructuring expenses, acquisitions and related expenses and a
divestiture, segment profits were slightly lower than in the third
quarter of 2014, and segment margins of 14.1% expanded 30 basis points
compared to the third quarter 2014 segment margins of 13.8%, largely due
to lower operating costs.
The segment’s sales for the first nine months of 2015 were 4% higher
than in 2014, and approximately even on a normalized basis, excluding
the impact of foreign exchange translation and the net impact of
acquisitions and a divestiture. Higher revenues from truck parts,
aerospace and chemical markets were partially offset by softer
conditions in oil and gas, semiconductor and general industrial markets.
Segment profits were 2% lower year-to-date 2015 compared to 2014 largely
due to the net impact of acquisitions and dispositions and foreign
currency. On a normalized basis, excluding these items and 2014
restructuring expense, segment profits increased 5% year-over-year
largely due to lower operating costs.
Engineered Products Segment
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Quarter Ended
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Nine Months Ended
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($ Millions)
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9/30/2015
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9/30/2014
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Change
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9/30/2015
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9/30/2014
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Change
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Sales
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$
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72.1
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$
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88.1
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-18
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%
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$
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227.8
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$
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275.4
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-17
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%
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Segment Profit
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$
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1.5
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$
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6.0
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-75
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%
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$
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8.9
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$
|
23.6
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|
-62
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%
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Segment Margin
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2.1
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%
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6.8
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%
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3.9
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%
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8.6
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%
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Normalized Net Sales
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$
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80.7
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$
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88.1
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-8
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%
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$
|
256.4
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$
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275.4
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|
-7
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%
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Normalized Segment Profit
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|
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$
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2.2
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|
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$
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6.0
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|
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-63
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%
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|
$
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13.3
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$
|
23.7
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|
-44
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%
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Normalized Segment Margin
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2.7
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%
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6.8
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%
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5.2
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%
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8.6
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%
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Adjusted EBITDA*
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$
|
7.0
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$
|
11.6
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|
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-40
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%
|
|
$
|
25.7
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|
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$
|
40.7
|
|
|
-37
|
%
|
Adjusted EBITDA Margin**
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|
|
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9.7
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%
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|
13.2
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%
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|
|
|
|
11.3
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%
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|
|
14.8
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%
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|
*See attached schedules for adjustments.
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**Adjusted EBITDA as a percentage of Sales
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Engineered Products sales in the third quarter of 2015 were 18% lower
than the third quarter of 2014. On a normalized basis, excluding the
negative impact of foreign exchange translation, the segment’s sales for
the quarter were 8% lower than in 2014. This reduction was driven by
lower sales of bearings, particularly in the fluid power and
agricultural equipment markets, coupled with continued weakness in
compressor parts and services demand from the Canadian natural gas
market and in the U.K. and Middle East.
Segment profits declined $4.5 million or 75% for the third quarter of
2015 from the comparable period in 2014. On a normalized basis,
excluding the impact of foreign exchange translation and restructuring
charges, the decline was $3.8 million. Lower sales volumes were the
primary drivers for the decline and more than offset cost reduction
initiatives in the segment.
For the first nine months of 2015, the Engineered Products segment’s
sales were 17% lower than the comparable period of 2014. On a normalized
basis, excluding the impact of foreign exchange translation, sales
declined 7% from the prior year. Lower sales of bearings in the U.S. and
lower sales of reciprocating compressor parts and related services in
Canada, the U.K., Middle East and the U.S. markets more than offset
sales increases in other European markets. Normalized segment profits,
excluding foreign exchange translation and restructuring charges,
declined $10.4 million or 44% from the first nine months of 2014, as
improved pricing and the favorable impact of cost reduction initiatives
were more than offset by the impact of lower sales volumes.
Power Systems Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
Nine Months Ended
|
|
|
($ Millions)
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|
|
|
9/30/2015
|
|
|
|
9/30/2014
|
|
|
Change
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|
|
9/30/2015
|
|
|
|
9/30/2014
|
|
|
Change
|
Sales
|
|
|
$
|
49.1
|
|
|
$
|
46.5
|
|
|
6
|
%
|
|
$
|
137.2
|
|
|
$
|
130.6
|
|
|
5
|
%
|
Segment Profit
|
|
|
$
|
9.2
|
|
|
$
|
9.6
|
|
|
-4
|
%
|
|
$
|
16.1
|
|
|
$
|
16.3
|
|
|
-1
|
%
|
Segment Margin
|
|
|
|
18.7
|
%
|
|
|
20.6
|
%
|
|
|
|
|
11.7
|
%
|
|
|
12.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Normalized Net Sales
|
|
|
$
|
49.1
|
|
|
$
|
46.5
|
|
|
6
|
%
|
|
$
|
137.2
|
|
|
$
|
130.6
|
|
|
5
|
%
|
Normalized Segment Profit
|
|
|
$
|
9.2
|
|
|
$
|
9.6
|
|
|
-4
|
%
|
|
$
|
21.1
|
|
|
$
|
16.3
|
|
|
29
|
%
|
Normalized Segment Margin
|
|
|
|
18.7
|
%
|
|
|
20.6
|
%
|
|
|
|
|
15.4
|
%
|
|
|
12.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA*
|
|
|
$
|
10.3
|
|
|
$
|
10.4
|
|
|
-1
|
%
|
|
$
|
19.2
|
|
|
$
|
18.9
|
|
|
2
|
%
|
Adjusted EBITDA Margin**
|
|
|
|
21.0
|
%
|
|
|
22.4
|
%
|
|
|
|
|
14.0
|
%
|
|
|
14.5
|
%
|
|
|
*See attached schedules for adjustments.
|
**Adjusted EBITDA as a percentage of Sales
|
In the Power Systems segment, sales increased by $2.6 million, or 6%,
from the third quarter of 2014. The increase includes higher engine and
service revenues partially offset by a decrease in repair parts. Segment
profits decreased 4% and segment profit margins declined to 18.7% from
20.6% in the third quarter of 2014 primarily as a result of the lower
mix of repair parts, new product development costs and higher selling,
general and administrative expenses.
The segment’s sales in the first nine months of 2015 were 5% higher than
in the comparable period of 2014 primarily due to higher revenues from
parts and service. Engine revenues were $0.3 million lower. Segment
profits of $16.1 million included a foreign exchange related $5.0
million loss provision associated with periods beyond 2015 for a
multi-year contract to supply engines to EDF that is priced in euros.
Normalized segment profits for the first nine months of 2015, excluding
this foreign exchange loss provision, improved $4.8 million
year-over-year, and margins were 15.4% compared to 12.5% in 2014. The
higher margins were primarily due to higher volume, a more favorable mix
of high-margin parts and services and improved pricing, which more than
offset increased selling, general and administrative expense.
Garlock Sealing Technologies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
Nine Months Ended
|
|
|
($ Millions)
|
|
|
|
9/30/2015
|
|
|
|
9/30/2014
|
|
|
Change
|
|
|
9/30/2015
|
|
|
|
9/30/2014
|
|
|
Change
|
Net Sales*
|
|
|
$
|
54.0
|
|
|
$
|
61.1
|
|
|
-12
|
%
|
|
$
|
165.2
|
|
|
$
|
183.1
|
|
|
-10
|
%
|
Third Party Sales
|
|
|
$
|
48.8
|
|
|
$
|
53.8
|
|
|
-9
|
%
|
|
$
|
149.3
|
|
|
$
|
163.6
|
|
|
-9
|
%
|
Operating Income
|
|
|
$
|
8.9
|
|
|
$
|
10.5
|
|
|
-15
|
%
|
|
$
|
29.1
|
|
|
$
|
222.1
|
|
|
-87
|
%
|
Operating Income Margin
|
|
|
|
16.5
|
%
|
|
|
17.2
|
%
|
|
|
|
|
17.6
|
%
|
|
|
121.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Normalized Net Sales
|
|
|
$
|
57.5
|
|
|
$
|
61.1
|
|
|
-6
|
%
|
|
$
|
173.3
|
|
|
$
|
183.1
|
|
|
-5
|
%
|
Normalized Operating Income
|
|
|
$
|
10.1
|
|
|
$
|
11.1
|
|
|
-9
|
%
|
|
$
|
31.4
|
|
|
$
|
37.1
|
|
|
-15
|
%
|
Normalized Oper. Inc. Margin
|
|
|
|
17.6
|
%
|
|
|
18.2
|
%
|
|
|
|
|
18.1
|
%
|
|
|
20.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA-A*
|
|
|
$
|
11.1
|
|
|
$
|
12.6
|
|
|
-12
|
%
|
|
$
|
34.5
|
|
|
$
|
41.3
|
|
|
-16
|
%
|
Adjusted EBITDA-A Margin**
|
|
|
|
20.6
|
%
|
|
|
20.6
|
%
|
|
|
|
|
20.9
|
%
|
|
|
22.6
|
%
|
|
|
* Includes inter-company sales
|
**Adjusted EBITDA-A as a percentage of Sales
|
Net sales at the deconsolidated operations of GST and its subsidiaries
(collectively “GST”) in the third quarter of 2015 decreased by 12%
compared to the third quarter of 2014. Excluding the negative effect of
foreign exchange translation, the decline was 6%. Market conditions were
soft in North America and Australia in most process industries including
steel processing, metals & mining, and in downstream oil and gas, where
refineries have continued to delay their maintenance work. Operating
income was down 15% from the third quarter of 2014, primarily due to the
lower volume and a less-profitable mix.
GST’s net sales in the first nine months of 2015 were 10% lower (5%
lower excluding foreign exchange translation) than 2014 reflecting lower
demand in North America and from foreign affiliates. Operating income
declined as a result of unfavorable volume and mix and the impact of
$186.6 million income reflected in the first nine months of 2014 related
to a reduction in the asbestos liability accrual on GST’s balance sheet
made in June 2014 to reflect GST’s amended plan of reorganization.
On a normalized basis excluding the impact of foreign exchange
translation and the 2014 changes in GST’s asbestos liability accrual,
GST’s operating income was down 15% from the first nine months of 2014.
The results of GST and certain subsidiaries were deconsolidated
effective June 5, 2010, when GST filed voluntary petitions for
reorganization under Chapter 11 of the United States Bankruptcy code.
These filings were the initial step in a process to reach a permanent
resolution of all of GST’s current and future asbestos claims. Tables
attached to this press release illustrate, on a pro-forma basis,
condensed consolidated financial results for the third quarter and nine
months of 2015 and 2014 as if GST were reconsolidated with EnPro based
on confirmation and consummation of GST’s second amended proposed plan
of reorganization filed on January 14, 2015. The narrative preceding
those tables includes an important discussion of the risks and
uncertainties applicable to confirmation and consummation of the third
amended plan of reorganization. Due to these risks and uncertainties,
while management believes the plan of reorganization can be confirmed,
management does not yet deem reconsolidation to be probable under
Regulation S-X of the Securities and Exchange Commission (SEC).
Therefore, pro forma financial statements are not required by the SEC.
EnPro is providing the pro forma financial information in this release
as supplemental information in response to requests from investors for
this information.
Corporate Expenses
Corporate expenses decreased $3.8 million to $6.3 million in the third
quarter of 2015 compared to the third quarter of 2014. The decrease was
primarily driven by lower employee costs, including benefits and
incentive compensation, lower professional service costs and share-based
compensation to directors due to the decreased fair value of certain
awards accounted for as liabilities. For the first nine months of 2015,
corporate expenses declined $11.4 million to $19.5 million for the same
reasons as given above for the quarter.
Goodwill and Other Intangible Asset Impairment
Due to the continuing deterioration in the oil and gas markets in which
our CPI reporting unit operates, the company concluded that events had
occurred and circumstances had changed that required it to recognize a
goodwill impairment charge ($46.1 million pre-tax) and an impairment of
the amortized trademarks carried by CPI ($0.9 million pre-tax) in the
second quarter of 2015. Together these impairment charges totaled $45.8
million on an after-tax basis.
Income tax
For the third quarter of 2015 income tax expense was $0.8 million
compared to $4.5 million in the third quarter of 2014. The low tax
expense in the third quarter of 2015 primarily results from additional
discrete items recorded including a $0.9 million benefit from
provision-to-return adjustments, and a $1.5 million net benefit from the
reversal of a previously recorded state tax liability related to the
sale of GRT. Without discrete items, the effective tax rate was 22.5% in
the third quarter of 2015 versus 29.4% in the third quarter of 2014.
For the first nine months of 2015, income tax expense was $0.7 million
compared to $8.7 million for the comparable period last year. The
volatility in the tax is primarily the result of significant discrete
items that were recorded during the first nine months of 2015. Without
discrete items, the effective tax rate was 26% in the first nine months
of 2015 versus 29.5% in the first nine months of 2014. The company’s
effective tax rate is directly impacted by the relative proportions of
revenue and income before taxes in the jurisdictions in which it
operates.
Cash Flows
EnPro’s cash balance stood at $92.0 million at September 30, 2015
compared to $194.2 million at December 31, 2014. Operating activities
provided $32.0 million of cash in the first nine months of 2015 compared
to using $9.9 million in the same period last year. The increase in cash
from operating activities was primarily due to lower pension
contributions of approximately $49.0 million, lower increases in
operating working capital of approximately $11.0 million, and lower
income taxes paid of approximately $8.0 million partially offset by
higher interest paid of approximately $14.0 million in 2015.
Investing activities used $72.2 million of cash during the first nine
months of 2015 compared to $31.7 million in 2014, primarily to fund
acquisitions, capital expenditures and ERP system implementations.
Financing activities used $59.3 million in cash in the first nine months
of 2015, primarily from $44.9 million spent to repurchase the majority
of the remaining outstanding convertible debentures, $80.0 million spent
to repurchase 1.2 million shares of outstanding common stock and the
payment of $13.8 million of dividends. These activities were funded by
cash on hand and additional borrowings of $77.9 million from the
company’s revolving credit facility. Financing activities in the first
nine months of 2014 provided cash of $176.9 million, primarily from
proceeds on the 5.875% senior notes.
GST’s cash and investment balance was $263.3 million at September 30,
2015 compared to $229.3 million at December 31, 2014. The increase
includes the collection of $21.0 million of asbestos-related insurance
proceeds since December 31, 2014.
Outlook
“Market conditions remain soft, and global economic volatility and
sluggish oil and gas markets have resulted in lower demand levels in
several of our businesses” said Steve Macadam, president and chief
executive officer. “We have sound demand levels in the nuclear,
petrochemical, and engine parts and service markets. However, softer
conditions in many of our other markets and the strong dollar continue
to affect our results. Given these ongoing market headwinds and our
results for the quarter, we expect segment profit for the year to be at,
or slightly below the low end of the guidance previously provided,
excluding the impact of additional restructuring charges expected in the
fourth quarter of 2015. We estimate restructuring charges for the year
to be in the range of $10.0 to $13.0 million compared to the $3.2
million included in our previous guidance. We expect GST’s results to be
within the range previously provided. This revised guidance is based on
exchange rates in effect at the end of the third quarter. Despite
current challenging market conditions, longer term, we expect continued
benefits from our strategic growth initiatives including growth from
recent and future strategic acquisitions and continued emphasis on
improving operational efficiencies,” he added.
CPI Restructuring
Earlier this week, the Company filed a Form 8-K disclosing plans for
restructuring of certain operations of the Company’s Compressor Products
International (CPI) unit, in connection with which the Company expects
to incur total restructuring expense in the range of $7.8 million to
$10.0 million. Approximately 90% of these expenses are expected to be
incurred in the fourth quarter of 2015, with the balance to be incurred
in the first half of fiscal 2016. “Upon completion, we expect this
restructuring plan will result in annualized savings of $3.0 million to
$4.0 million” Mr. Macadam commented.
Share Repurchase Program
Yesterday, the Board of Directors approved a new program authorizing the
company to repurchase up to $50.0 million of its common shares. Under
this program, the company may repurchase shares in both open market and
privately negotiated transactions. The company’s management will
determine the timing and amount of the transactions based on its
evaluation of market conditions and other factors. Repurchases may also
be made under Rule 10b5-1 plans, which permit the company to repurchase
shares when it otherwise would be precluded from doing so under insider
trading laws. The repurchase program may be suspended or discontinued at
any time and expires in two years.
"This repurchase authorization illustrates our confidence in EnPro’s
sustained cash flow and our commitment to maintaining long-term
shareholder value," said Mr. Macadam.
Conference Call and Webcast Information
EnPro will hold a conference call today, October 29, at 10:00 a.m.
Eastern Time to discuss third quarter 2015 results. Investors who wish
to participate in the call should dial 1-800-851-4704 approximately 10
minutes before the call begins and provide conference id number
83302606. A live audio webcast of the call and accompanying slide
presentation will be accessible from the company’s website, http://www.enproindustries.com.
To access the presentation, log on to the webcast by clicking the link
on the company’s home page.
Deconsolidation and Pro Forma Results of Garlock Sealing Technologies
LLC
Results for the third quarters of 2015 and 2014 reflect the
deconsolidation of Garlock Sealing Technologies LLC (GST) and its
subsidiaries, effective June 5, 2010, when GST filed a voluntary
petition under Chapter 11 of the U.S. Bankruptcy Code to begin a process
in pursuit of an efficient and permanent resolution to all current and
future asbestos claims against it. Deconsolidation is required by
generally accepted accounting principles. To aid in comparisons of
year-over-year data, the company has attached a schedule to this press
release showing key operating measures for both EnPro and GST on a pro
forma basis.
Tables attached to this press release illustrate, on a pro-forma basis,
condensed consolidated financial results for the third quarters of 2015
and 2014 as if GST were reconsolidated with EnPro based on confirmation
and consummation of GST’s second amended proposed plan of
reorganization. The narrative preceding those tables includes an
important discussion of the risks and uncertainties applicable to
confirmation and consummation of the second amended plan of
reorganization. Due to these risks and uncertainties, while management
believes the plan of reorganization can be confirmed, management does
not yet deem reconsolidation to be probable under Regulation S-X of the
Securities and Exchange Commission (SEC). Therefore, pro forma financial
statements are not required by the SEC. We are providing the pro forma
financial information in this release as supplemental information in
response to requests from investors for this information.
Non-GAAP Financial Information
This press release contains financial measures that have not been
prepared in accordance with GAAP. They include income before
asbestos-related expenses and other selected items, EBITDA-A, EBITDA and
related per share amounts. Tables showing the effect of these non-GAAP
financial measures for third quarters of 2015 and 2014 are attached to
the release.
Forward-Looking Statements
Statements in this press release 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 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: general economic conditions in the markets served by
our businesses, some of which are cyclical and experience periodic
downturns; prices and availability of raw materials; and the amount of
any payments required to satisfy contingent liabilities related to
discontinued operations of our predecessors, including liabilities for
certain products, environmental matters, guaranteed debt payments,
employee benefit obligations and other matters. In addition, adverse
developments could arise in regard to voluntary petitions filed by
certain of our subsidiaries in U.S. Bankruptcy Court to establish a
trust that would resolve all current and future asbestos claims. Our
filings with the Securities and Exchange Commission, including the Form
10-K for the year ended December 31, 2014 and Form 10-Q for the quarter
ended June 30, 2015, describe these and other risks and uncertainties in
more detail. We do not undertake to update any forward-looking statement
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.
About EnPro Industries
EnPro Industries, Inc. is a leader in sealing products, metal polymer
and filament wound bearings, components and service for reciprocating
compressors, diesel and dual-fuel engines and other engineered products
for use in critical applications by industries worldwide. For more
information about EnPro, visit the company’s website at http://www.enproindustries.com.
|
|
|
|
|
|
|
|
|
|
|
EnPro Industries, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Operations (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarters and Nine Months Ended September 30, 2015 and 2014
|
(Stated in Millions of Dollars, Except Per Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended
|
|
|
Nine Months Ended
|
|
|
|
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
2015
|
|
|
|
2014
|
|
Net sales
|
|
|
$
|
306.6
|
|
|
$
|
302.6
|
|
|
|
$
|
882.5
|
|
|
$
|
902.9
|
|
Cost of sales
|
|
|
|
205.2
|
|
|
|
196.4
|
|
|
|
|
590.0
|
|
|
|
592.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
101.4
|
|
|
|
106.2
|
|
|
|
|
292.5
|
|
|
|
310.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
|
74.8
|
|
|
|
77.4
|
|
|
|
|
226.2
|
|
|
|
239.8
|
|
|
Goodwill and other intangible asset impairment
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
47.0
|
|
|
|
-
|
|
|
Other
|
|
|
|
1.7
|
|
|
|
1.2
|
|
|
|
|
3.3
|
|
|
|
1.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
|
76.5
|
|
|
|
78.6
|
|
|
|
|
276.5
|
|
|
|
241.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
24.9
|
|
|
|
27.6
|
|
|
|
|
16.0
|
|
|
|
69.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
(12.9
|
)
|
|
|
(10.8
|
)
|
|
|
|
(39.0
|
)
|
|
|
(32.3
|
)
|
Interest income
|
|
|
|
0.1
|
|
|
|
0.3
|
|
|
|
|
0.4
|
|
|
|
0.8
|
|
Other income (expense)
|
|
|
|
0.1
|
|
|
|
(4.0
|
)
|
|
|
|
(4.2
|
)
|
|
|
(10.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
|
12.2
|
|
|
|
13.1
|
|
|
|
|
(26.8
|
)
|
|
|
26.9
|
|
Income tax expense
|
|
|
|
(0.8
|
)
|
|
|
(4.5
|
)
|
|
|
|
(0.7
|
)
|
|
|
(8.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
11.4
|
|
|
$
|
8.6
|
|
|
|
$
|
(27.5
|
)
|
|
$
|
18.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share
|
|
|
$
|
0.52
|
|
|
$
|
0.36
|
|
|
|
$
|
(1.21
|
)
|
|
$
|
0.80
|
|
Average common shares outstanding (millions)
|
|
|
|
22.0
|
|
|
|
24.0
|
|
|
|
|
22.7
|
|
|
|
22.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per share
|
|
|
$
|
0.51
|
|
|
$
|
0.33
|
|
|
|
$
|
(1.21
|
)
|
|
$
|
0.71
|
|
Average common shares outstanding (millions)
|
|
|
|
22.1
|
|
|
|
26.1
|
|
|
|
|
22.7
|
|
|
|
25.7
|
|
|
|
|
|
|
|
EnPro Industries, Inc.
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Cash Flows (Unaudited)
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended September 30, 2015 and 2014
|
(Stated in Millions of Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
Operating activities
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
(27.5
|
)
|
|
$
|
18.2
|
|
|
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
22.4
|
|
|
|
22.2
|
|
|
|
|
Amortization
|
|
|
|
20.9
|
|
|
|
20.8
|
|
|
|
|
Loss on exchange and repurchase of convertible debentures
|
|
|
|
2.8
|
|
|
|
10.0
|
|
|
|
|
Goodwill and other intangible asset impairment
|
|
|
|
47.0
|
|
|
|
-
|
|
|
|
|
Deferred income taxes
|
|
|
|
0.3
|
|
|
|
(22.4
|
)
|
|
|
|
Stock-based compensation
|
|
|
|
3.6
|
|
|
|
7.8
|
|
|
|
|
Other non-cash adjustments
|
|
|
|
1.1
|
|
|
|
4.8
|
|
|
Change in assets and liabilities, net of effects of acquisitions
of businesses:
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
|
(2.1
|
)
|
|
|
(27.2
|
)
|
|
|
|
Inventories
|
|
|
|
(12.6
|
)
|
|
|
(9.8
|
)
|
|
|
|
Accounts payable
|
|
|
|
(9.5
|
)
|
|
|
(2.8
|
)
|
|
|
|
Other current assets and liabilities
|
|
|
|
-
|
|
|
|
10.4
|
|
|
|
|
Other non-current assets and liabilities
|
|
|
|
(14.4
|
)
|
|
|
(41.9
|
)
|
|
|
|
Net cash provided by (used in) operating activities
|
|
|
|
32.0
|
|
|
|
(9.9
|
)
|
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
|
(23.4
|
)
|
|
|
(20.4
|
)
|
|
Payments for capitalized internal-use software
|
|
|
|
(3.6
|
)
|
|
|
(7.1
|
)
|
|
Acquisitions, net of cash acquired
|
|
|
|
(45.5
|
)
|
|
|
(4.3
|
)
|
|
Other
|
|
|
|
|
0.3
|
|
|
|
0.1
|
|
|
|
|
Net cash used in investing activities
|
|
|
|
(72.2
|
)
|
|
|
(31.7
|
)
|
|
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
Net proceeds from short-term borrowings
|
|
|
|
3.6
|
|
|
|
1.9
|
|
|
Proceeds from debt
|
|
|
|
177.7
|
|
|
|
637.0
|
|
|
Repayments of debt
|
|
|
|
(123.1
|
)
|
|
|
(399.0
|
)
|
|
Repurchase of common stock
|
|
|
|
(80.0
|
)
|
|
|
-
|
|
|
Dividends paid
|
|
|
|
(13.8
|
)
|
|
|
-
|
|
|
Debt issuance costs
|
|
|
|
-
|
|
|
|
(5.2
|
)
|
|
Repurchase of convertible debentures conversion option
|
|
|
|
(21.6
|
)
|
|
|
(53.6
|
)
|
|
Other
|
|
|
|
|
(2.1
|
)
|
|
|
(4.2
|
)
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
|
(59.3
|
)
|
|
|
176.9
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
(2.7
|
)
|
|
|
(1.3
|
)
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
(102.2
|
)
|
|
|
134.0
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
194.2
|
|
|
|
64.4
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
92.0
|
|
|
$
|
198.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
Cash paid during the period for:
|
|
|
|
|
|
|
|
Interest
|
|
|
$
|
35.8
|
|
|
$
|
22.3
|
|
|
|
Income taxes
|
|
|
$
|
22.8
|
|
|
$
|
31.1
|
|
|
|
|
|
|
|
EnPro Industries, Inc.
|
|
|
|
|
|
|
|
|
Consolidated Balance Sheets (Unaudited)
|
|
|
|
|
|
|
|
|
As of September 30, 2015 and December 31, 2014
|
(Stated in Millions of Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
92.0
|
|
|
$
|
194.2
|
|
|
Accounts receivable
|
|
|
|
223.6
|
|
|
|
205.2
|
|
|
Inventories
|
|
|
|
178.0
|
|
|
|
159.7
|
|
|
Other current assets
|
|
|
|
52.3
|
|
|
|
44.0
|
|
|
|
Total current assets
|
|
|
|
545.9
|
|
|
|
603.1
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment
|
|
|
|
210.9
|
|
|
|
199.3
|
|
Goodwill
|
|
|
|
196.6
|
|
|
|
232.4
|
|
Other intangible assets
|
|
|
|
198.1
|
|
|
|
202.8
|
|
Investment in GST
|
|
|
|
236.9
|
|
|
|
236.9
|
|
Deferred income taxes and income tax receivable
|
|
|
|
107.6
|
|
|
|
80.3
|
|
Other assets
|
|
|
|
43.8
|
|
|
|
49.2
|
|
|
|
Total assets
|
|
|
$
|
1,539.8
|
|
|
$
|
1,604.0
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
Short-term borrowings from GST
|
|
|
$
|
24.0
|
|
|
$
|
23.6
|
|
|
Notes payable to GST
|
|
|
|
12.2
|
|
|
|
11.7
|
|
|
Current maturities of long-term debt
|
|
|
|
2.3
|
|
|
|
22.5
|
|
|
Accounts payable
|
|
|
|
90.9
|
|
|
|
87.8
|
|
|
Accrued expenses
|
|
|
|
135.2
|
|
|
|
131.6
|
|
|
|
Total current liabilities
|
|
|
|
264.6
|
|
|
|
277.2
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
376.7
|
|
|
|
298.6
|
|
Notes payable to GST
|
|
|
|
271.0
|
|
|
|
259.3
|
|
Other liabilities
|
|
|
|
143.8
|
|
|
|
130.5
|
|
|
|
Total liabilities
|
|
|
|
1,056.1
|
|
|
|
965.6
|
|
|
|
|
|
|
|
|
|
Temporary equity
|
|
|
|
-
|
|
|
|
1.0
|
|
|
|
|
|
|
|
|
|
Shareholders' equity
|
|
|
|
|
|
|
Common stock
|
|
|
|
0.2
|
|
|
|
0.2
|
|
|
Additional paid-in capital
|
|
|
|
376.9
|
|
|
|
477.3
|
|
|
Retained earnings
|
|
|
|
154.0
|
|
|
|
195.3
|
|
|
Accumulated other comprehensive loss
|
|
|
|
(46.1
|
)
|
|
|
(34.1
|
)
|
|
Common stock held in treasury, at cost
|
|
|
|
(1.3
|
)
|
|
|
(1.3
|
)
|
|
|
Total shareholders' equity
|
|
|
|
483.7
|
|
|
|
637.4
|
|
|
|
Total liabilities and equity
|
|
|
$
|
1,539.8
|
|
|
$
|
1,604.0
|
|
|
|
|
|
|
|
|
|
|
|
|
EnPro Industries, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Information (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarters and Nine Months Ended September 30, 2015 and 2014
|
(Stated in Millions of Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended
|
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sealing Products
|
|
|
|
$
|
186.3
|
|
|
$
|
168.9
|
|
|
|
$
|
520.2
|
|
|
$
|
499.3
|
|
Engineered Products
|
|
|
|
72.1
|
|
|
|
88.1
|
|
|
|
|
227.8
|
|
|
|
275.4
|
|
Power Systems
|
|
|
|
|
49.1
|
|
|
|
46.5
|
|
|
|
|
137.2
|
|
|
|
130.6
|
|
|
|
|
|
|
307.5
|
|
|
|
303.5
|
|
|
|
|
885.2
|
|
|
|
905.3
|
|
Less intersegment sales
|
|
|
|
(0.9
|
)
|
|
|
(0.9
|
)
|
|
|
|
(2.7
|
)
|
|
|
(2.4
|
)
|
|
|
|
|
$
|
306.6
|
|
|
$
|
302.6
|
|
|
|
$
|
882.5
|
|
|
$
|
902.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended
|
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sealing Products
|
|
|
|
$
|
22.5
|
|
|
$
|
23.0
|
|
|
|
$
|
61.7
|
|
|
$
|
62.9
|
|
Engineered Products
|
|
|
|
1.5
|
|
|
|
6.0
|
|
|
|
|
8.9
|
|
|
|
23.6
|
|
Power Systems
|
|
|
|
|
9.2
|
|
|
|
9.6
|
|
|
|
|
16.1
|
|
|
|
16.3
|
|
|
|
|
|
$
|
33.2
|
|
|
$
|
38.6
|
|
|
|
$
|
86.7
|
|
|
$
|
102.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended
|
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
2015
|
|
|
|
2014
|
|
Sealing Products
|
|
|
|
|
12.1
|
%
|
|
|
13.6
|
%
|
|
|
|
11.9
|
%
|
|
|
12.6
|
%
|
Engineered Products
|
|
|
|
2.1
|
%
|
|
|
6.8
|
%
|
|
|
|
3.9
|
%
|
|
|
8.6
|
%
|
Power Systems
|
|
|
|
|
18.7
|
%
|
|
|
20.6
|
%
|
|
|
|
11.7
|
%
|
|
|
12.5
|
%
|
|
|
|
|
|
10.8
|
%
|
|
|
12.8
|
%
|
|
|
|
9.8
|
%
|
|
|
11.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Segment Profit to Net Income (Loss)
|
|
|
|
|
Quarters Ended
|
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit
|
|
|
|
$
|
33.2
|
|
|
$
|
38.6
|
|
|
|
$
|
86.7
|
|
|
$
|
102.8
|
|
Corporate expenses
|
|
|
|
(6.3
|
)
|
|
|
(10.1
|
)
|
|
|
|
(19.5
|
)
|
|
|
(30.9
|
)
|
Goodwill and other intangible asset impairment
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(47.0
|
)
|
|
|
-
|
|
Interest expense, net
|
|
|
|
(12.8
|
)
|
|
|
(10.5
|
)
|
|
|
|
(38.6
|
)
|
|
|
(31.5
|
)
|
Other expense, net
|
|
|
|
(1.9
|
)
|
|
|
(4.9
|
)
|
|
|
|
(8.4
|
)
|
|
|
(13.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
|
12.2
|
|
|
|
13.1
|
|
|
|
|
(26.8
|
)
|
|
|
26.9
|
|
Income tax expense
|
|
|
|
(0.8
|
)
|
|
|
(4.5
|
)
|
|
|
|
(0.7
|
)
|
|
|
(8.7
|
)
|
Net income (loss)
|
|
|
|
$
|
11.4
|
|
|
$
|
8.6
|
|
|
|
$
|
(27.5
|
)
|
|
$
|
18.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit is total segment revenue reduced by operating
expenses and restructuring and other costs identifiable with the
segment. Corporate expenses include general corporate
administrative costs. Expenses not directly attributable to the
segments, corporate expenses, impairment charges, net interest
expense, gains/losses related to the sale of assets and income
taxes are not included in the computation of segment profit. The
accounting policies of the reportable segments are the same as
those for the Company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EnPro Industries, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted Net Income to Net Income (Loss)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarters and Nine Months Ended September 30, 2015 and 2014
|
|
|
|
|
|
|
|
(Stated in Millions of Dollars, Except Per Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended September 30,
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
|
|
$
|
|
|
Per share
|
|
|
|
$
|
|
|
Per share
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
|
|
|
$
|
9.8
|
|
|
$
|
0.44
|
|
|
|
$
|
12.3
|
|
|
$
|
0.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments (net of tax):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring costs
|
|
|
|
(0.5
|
)
|
|
|
(0.03
|
)
|
|
|
|
(0.3
|
)
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on exchange and repurchase of convertible debentures
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(2.5
|
)
|
|
|
(0.10
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Environmental reserve adjustment
|
|
|
|
(0.5
|
)
|
|
|
(0.02
|
)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value adjustment to acquisition date inventory
|
|
|
|
(0.2
|
)
|
|
|
(0.01
|
)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition expenses
|
|
|
|
(0.3
|
)
|
|
|
(0.01
|
)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(0.4
|
)
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax accrual adjustments
|
|
|
|
3.1
|
|
|
|
0.14
|
|
|
|
|
(0.5
|
)
|
|
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of shares deliverable under convertible debenture hedge
|
|
|
|
N/A
|
|
|
NA
|
|
|
|
N/A
|
|
|
|
(0.05
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact
|
|
|
|
|
1.6
|
|
|
|
0.07
|
|
|
|
|
(3.7
|
)
|
|
|
(0.19
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
11.4
|
|
|
$
|
0.51
|
|
|
|
$
|
8.6
|
|
|
$
|
0.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
|
|
$
|
|
|
Per share
|
|
|
|
$
|
|
|
Per share
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
|
|
|
$
|
21.1
|
|
|
$
|
0.94
|
|
|
|
$
|
26.9
|
|
|
$
|
1.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments (net of tax):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring costs
|
|
|
|
(1.4
|
)
|
|
|
(0.06
|
)
|
|
|
|
(0.7
|
)
|
|
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on exchange and repurchase of convertible debentures
|
|
|
|
(1.8
|
)
|
|
|
(0.08
|
)
|
|
|
|
(6.2
|
)
|
|
|
(0.24
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Environmental reserve adjustment
|
|
|
|
(0.6
|
)
|
|
|
(0.03
|
)
|
|
|
|
(0.4
|
)
|
|
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill and other intangible asset impairment
|
|
|
|
(45.8
|
)
|
|
|
(2.02
|
)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value adjustment to acquisition date inventory
|
|
|
|
(0.8
|
)
|
|
|
(0.03
|
)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition expenses
|
|
|
|
(1.4
|
)
|
|
|
(0.06
|
)
|
|
|
|
(0.3
|
)
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
(1.0
|
)
|
|
|
(0.03
|
)
|
|
|
|
(0.5
|
)
|
|
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax accrual adjustments
|
|
|
|
4.2
|
|
|
|
0.18
|
|
|
|
|
(0.6
|
)
|
|
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of shares deliverable under convertible debenture hedge
|
|
|
|
N/A
|
|
|
|
(0.02
|
)
|
|
|
|
N/A
|
|
|
|
(0.12
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact
|
|
|
|
(48.6
|
)
|
|
|
(2.15
|
)
|
|
|
|
(8.7
|
)
|
|
|
(0.45
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
(27.5
|
)
|
|
$
|
(1.21
|
)
|
|
|
$
|
18.2
|
|
|
$
|
0.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 net income and
earnings per share, including items that may recur from time to
time. This presentation enables readers to better compare EnPro
Industries, Inc. to other diversified industrial manufacturing
companies that do not incur the sporadic impact of restructuring
activities or other selected items. 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The amounts above, which may be considered non-GAAP financial
measures, are shown on an after-tax basis and have been calculated
by applying the Company's tax rate to the pre-tax amount. The fair
value adjustment to acquisition date inventory is included in cost
of sales, the acquisition expenses are included in selling,
general and administrative expenses, and the restructuring costs,
loss on exchange and repurchase of convertible debentures,
environmental reserve adjustment and other are included as part of
other operating expense and other income (expense). Per share
amounts were calculated by dividing by the weighted-average shares
of diluted common stock outstanding during the periods The impact
of shares deliverable under convertible debenture hedge represents
the per share effect of the call options purchased to reduce the
potential dilution to our common shareholders from the conversion
of our convertible debentures. For accounting purposes, during
the periods they were outstanding, the call options were excluded
from the GAAP diluted earnings per share computation because they
were antidilutive. They were settled and the corresponding value
was realized in the second quarter of 2015.
|
|
|
|
|
|
|
|
|
|
|
EnPro Industries, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted Segment EBITDA to Segment Profit
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarters and Nine Months Ended September 30, 2015 and 2014
|
(Stated in Millions of Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended September 30, 2015
|
|
|
|
|
|
Sealing
|
|
Engineered
|
|
Power
|
|
Total
|
|
|
|
|
|
Products
|
|
Products
|
|
Systems
|
|
Segments
|
|
|
|
|
|
|
|
|
|
|
Earnings before interest, income taxes, depreciation,
amortization, and other selected items (adjusted EBITDA)
|
|
|
$
|
32.1
|
|
|
$
|
7.0
|
|
|
$
|
10.3
|
|
|
$
|
49.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition expenses
|
|
|
|
(1.1
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1.1
|
)
|
|
Restructuring costs
|
|
|
|
(0.1
|
)
|
|
|
(0.7
|
)
|
|
|
-
|
|
|
|
(0.8
|
)
|
|
Depreciation and amortization expense
|
|
|
|
(8.4
|
)
|
|
|
(4.8
|
)
|
|
|
(1.1
|
)
|
|
|
(14.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit
|
|
|
$
|
22.5
|
|
|
$
|
1.5
|
|
|
$
|
9.2
|
|
|
$
|
33.2
|
|
Adjusted EBITDA margin
|
|
|
|
17.2
|
%
|
|
|
9.7
|
%
|
|
|
21.0
|
%
|
|
|
16.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended September 30, 2014
|
|
|
|
|
|
Sealing
|
|
Engineered
|
|
Power
|
|
Total
|
|
|
|
|
|
Products
|
|
Products
|
|
Systems
|
|
Segments
|
|
|
|
|
|
|
|
|
|
|
Earnings before interest, income taxes, depreciation,
amortization, and other selected items (adjusted EBITDA)
|
|
|
$
|
31.2
|
|
|
$
|
11.6
|
|
|
$
|
10.4
|
|
|
$
|
53.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring costs
|
|
|
|
(0.5
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.5
|
)
|
|
Depreciation and amortization expense
|
|
|
|
(7.7
|
)
|
|
|
(5.6
|
)
|
|
|
(0.8
|
)
|
|
|
(14.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit
|
|
|
$
|
23.0
|
|
|
$
|
6.0
|
|
|
$
|
9.6
|
|
|
$
|
38.6
|
|
Adjusted EBITDA margin
|
|
|
|
18.5
|
%
|
|
|
13.2
|
%
|
|
|
22.4
|
%
|
|
|
17.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2015
|
|
|
|
|
|
Sealing
|
|
Engineered
|
|
Power
|
|
Total
|
|
|
|
|
|
Products
|
|
Products
|
|
Systems
|
|
Segments
|
|
|
|
|
|
|
|
|
|
|
Earnings before interest, income taxes, depreciation,
amortization, and other selected items (adjusted EBITDA)
|
|
|
$
|
90.6
|
|
|
$
|
25.7
|
|
|
$
|
19.2
|
|
|
$
|
135.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition expenses
|
|
|
|
(3.5
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(3.5
|
)
|
|
Restructuring costs
|
|
|
|
-
|
|
|
|
(2.2
|
)
|
|
|
-
|
|
|
|
(2.2
|
)
|
|
Depreciation and amortization expense
|
|
|
|
(25.4
|
)
|
|
|
(14.6
|
)
|
|
|
(3.1
|
)
|
|
|
(43.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit
|
|
|
$
|
61.7
|
|
|
$
|
8.9
|
|
|
$
|
16.1
|
|
|
$
|
86.7
|
|
Adjusted EBITDA margin
|
|
|
|
17.4
|
%
|
|
|
11.3
|
%
|
|
|
14.0
|
%
|
|
|
15.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2014
|
|
|
|
|
|
Sealing
|
|
Engineered
|
|
Power
|
|
Total
|
|
|
|
|
|
Products
|
|
Products
|
|
Systems
|
|
Segments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before interest, income taxes, depreciation,
amortization, and other selected items (adjusted EBITDA)
|
|
|
$
|
87.3
|
|
|
$
|
40.7
|
|
|
$
|
18.9
|
|
|
$
|
146.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition expenses
|
|
|
|
(0.2
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.2
|
)
|
|
Restructuring costs
|
|
|
|
(1.1
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1.1
|
)
|
|
Depreciation and amortization expense
|
|
|
|
(23.1
|
)
|
|
|
(17.1
|
)
|
|
|
(2.6
|
)
|
|
|
(42.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit
|
|
|
$
|
62.9
|
|
|
$
|
23.6
|
|
|
$
|
16.3
|
|
|
$
|
102.8
|
|
Adjusted EBITDA margin
|
|
|
|
17.5
|
%
|
|
|
14.8
|
%
|
|
|
14.5
|
%
|
|
|
16.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For a reconciliation of segment profit to net income (loss),
please refer to the Segment Information (Unaudited) schedule.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EnPro Industries, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA to Net Income (Loss)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarters and Nine Months Ended September 30, 2015 and 2014
|
(Stated in Millions of Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended
|
|
|
Nine Months Ended
|
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
|
|
|
2015
|
|
|
|
|
2014
|
|
|
|
|
2015
|
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before interest, income taxes, depreciation,
amortization, and other selected items (adjusted EBITDA) *
|
|
|
$
|
41.8
|
|
|
|
$
|
43.1
|
|
|
|
$
|
113.6
|
|
|
|
$
|
115.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to arrive at earnings before interest, income taxes,
depreciation and amortization (EBITDA):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring costs
|
|
|
|
(0.8
|
)
|
|
|
|
(0.5
|
)
|
|
|
|
(2.2
|
)
|
|
|
|
(1.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Environmental reserve adjustment
|
|
|
|
(0.8
|
)
|
|
|
|
-
|
|
|
|
|
(1.0
|
)
|
|
|
|
(0.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on exchange and repurchase of convertible debentures
|
|
|
|
-
|
|
|
|
|
(4.0
|
)
|
|
|
|
(2.8
|
)
|
|
|
|
(10.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill and other intangible asset impairment
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(47.0
|
)
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition expenses
|
|
|
|
(0.5
|
)
|
|
|
|
(0.1
|
)
|
|
|
|
(2.2
|
)
|
|
|
|
(0.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value adjustment to acquisition date inventory
|
|
|
|
(0.3
|
)
|
|
|
|
-
|
|
|
|
|
(1.3
|
)
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
(0.1
|
)
|
|
|
|
(0.8
|
)
|
|
|
|
(2.0
|
)
|
|
|
|
(1.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
|
39.3
|
|
|
|
|
37.7
|
|
|
|
|
55.1
|
|
|
|
|
101.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to arrive at net income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
|
(12.8
|
)
|
|
|
|
(10.5
|
)
|
|
|
|
(38.6
|
)
|
|
|
|
(31.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
(0.8
|
)
|
|
|
|
(4.5
|
)
|
|
|
|
(0.7
|
)
|
|
|
|
(8.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense
|
|
|
|
(14.3
|
)
|
|
|
|
(14.1
|
)
|
|
|
|
(43.3
|
)
|
|
|
|
(43.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
11.4
|
|
|
|
$
|
8.6
|
|
|
|
$
|
(27.5
|
)
|
|
|
$
|
18.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Adjusted EBITDA as presented also represents the amount defined as
"EBITDA" under the indenture governing the Company's 5.875% senior
notes due 2022.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EnPro Industries, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Normalized Net Sales to Net Sales (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarters and Nine Months Ended September 30, 2015 and 2014
|
|
|
|
|
|
|
(Stated in Millions of Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended September 30, 2015
|
|
|
|
|
Sealing
|
|
Engineered
|
|
Power
|
|
Intersegment
|
|
|
|
|
|
|
Products
|
|
Products
|
|
Systems
|
|
sales
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Normalized net sales
|
|
$
|
154.8
|
|
|
$
|
80.7
|
|
|
$
|
49.1
|
|
$
|
(0.9
|
)
|
|
$
|
283.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange translation
|
|
|
(5.4
|
)
|
|
|
(8.6
|
)
|
|
|
-
|
|
|
-
|
|
|
|
(14.0
|
)
|
|
Acquisitions
|
|
|
36.9
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
36.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
186.3
|
|
|
$
|
72.1
|
|
|
$
|
49.1
|
|
$
|
(0.9
|
)
|
|
$
|
306.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended September 30, 2014
|
|
|
|
|
Sealing
|
|
Engineered
|
|
Power
|
|
Intersegment
|
|
|
|
|
|
|
Products
|
|
Products
|
|
Systems
|
|
sales
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Normalized net sales
|
|
$
|
161.2
|
|
|
$
|
88.1
|
|
|
$
|
46.5
|
|
$
|
(0.9
|
)
|
|
$
|
294.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Divestitures
|
|
|
7.7
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
7.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
168.9
|
|
|
$
|
88.1
|
|
|
$
|
46.5
|
|
$
|
(0.9
|
)
|
|
$
|
302.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2015
|
|
|
|
|
Sealing
|
|
Engineered
|
|
Power
|
|
Intersegment
|
|
|
|
|
|
|
Products
|
|
Products
|
|
Systems
|
|
sales
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Normalized net sales
|
|
$
|
474.6
|
|
|
$
|
256.4
|
|
|
$
|
137.2
|
|
$
|
(2.7
|
)
|
|
$
|
865.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange translation
|
|
|
(18.2
|
)
|
|
|
(28.6
|
)
|
|
|
-
|
|
|
-
|
|
|
|
(46.8
|
)
|
|
Acquisitions
|
|
|
63.8
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
63.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
520.2
|
|
|
$
|
227.8
|
|
|
$
|
137.2
|
|
$
|
(2.7
|
)
|
|
$
|
882.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2014
|
|
|
|
|
Sealing
|
|
Engineered
|
|
Power
|
|
Intersegment
|
|
|
|
|
|
|
Products
|
|
Products
|
|
Systems
|
|
sales
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Normalized net sales
|
|
$
|
474.6
|
|
|
$
|
275.4
|
|
|
$
|
130.6
|
|
$
|
(2.4
|
)
|
|
$
|
878.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Divestitures
|
|
|
24.7
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
24.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
499.3
|
|
|
$
|
275.4
|
|
|
$
|
130.6
|
|
$
|
(2.4
|
)
|
|
$
|
902.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For a reconciliation of segment net sales to net sales, please
refer to the Segment Information (Unaudited) schedule.
|
|
|
|
|
|
|
|
|
|
EnPro Industries, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Normalized Segment Profit to Segment Profit
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarters and Nine Months Ended September 30, 2015 and 2014
|
|
|
|
|
|
|
(Stated in Millions of Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended September 30, 2015
|
|
|
|
|
Sealing
|
|
Engineered
|
|
Power
|
|
Total
|
|
|
|
|
Products
|
|
Products
|
|
Systems
|
|
Segments
|
|
|
|
|
|
|
|
|
|
|
|
Normalized segment profit
|
|
$
|
21.9
|
|
|
$
|
2.2
|
|
|
$
|
9.2
|
|
|
$
|
33.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Acquisitions
|
|
|
0.7
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.7
|
|
|
Restructuring
|
|
|
(0.1
|
)
|
|
|
(0.7
|
)
|
|
|
-
|
|
|
|
(0.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit
|
|
$
|
22.5
|
|
|
$
|
1.5
|
|
|
$
|
9.2
|
|
|
$
|
33.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended September 30, 2014
|
|
|
|
|
Sealing
|
|
Engineered
|
|
Power
|
|
Total
|
|
|
|
|
Products
|
|
Products
|
|
Systems
|
|
Segments
|
|
|
|
|
|
|
|
|
|
|
|
Normalized segment profit
|
|
$
|
22.2
|
|
|
$
|
6.0
|
|
|
$
|
9.6
|
|
|
$
|
37.8
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Divestitures
|
|
|
1.3
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1.3
|
|
|
Restructuring
|
|
|
(0.5
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit
|
|
$
|
23.0
|
|
|
$
|
6.0
|
|
|
$
|
9.6
|
|
|
$
|
38.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2015
|
|
|
|
|
Sealing
|
|
Engineered
|
|
Power
|
|
Total
|
|
|
|
|
Products
|
|
Products
|
|
Systems
|
|
Segments
|
|
|
|
|
|
|
|
|
|
|
|
Normalized segment profit
|
|
$
|
62.3
|
|
|
$
|
13.3
|
|
|
$
|
21.1
|
|
|
$
|
96.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Foreign exchange translation
|
|
|
(1.0
|
)
|
|
|
(2.2
|
)
|
|
|
-
|
|
|
|
(3.2
|
)
|
|
Acquisitions
|
|
|
0.4
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.4
|
|
|
Restructuring
|
|
|
-
|
|
|
|
(2.2
|
)
|
|
|
-
|
|
|
|
(2.2
|
)
|
|
EDF contract
|
|
|
-
|
|
|
|
-
|
|
|
|
(5.0
|
)
|
|
|
(5.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit
|
|
$
|
61.7
|
|
|
$
|
8.9
|
|
|
$
|
16.1
|
|
|
$
|
86.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2014
|
|
|
|
|
Sealing
|
|
Engineered
|
|
Power
|
|
Total
|
|
|
|
|
Products
|
|
Products
|
|
Systems
|
|
Segments
|
|
|
|
|
|
|
|
|
|
|
|
Normalized segment profit
|
|
$
|
59.5
|
|
|
$
|
23.7
|
|
|
$
|
16.3
|
|
|
$
|
99.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Acquisitions/Divestitures
|
|
|
4.5
|
|
|
|
(0.1
|
)
|
|
|
-
|
|
|
|
4.4
|
|
|
Restructuring
|
|
|
(1.1
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(1.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit
|
|
$
|
62.9
|
|
|
$
|
23.6
|
|
|
$
|
16.3
|
|
|
$
|
102.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For a reconciliation of segment profit to net income (loss),
please refer to the Segment Information (Unaudited) schedule.
|
|
Unaudited Pro Forma Information Reflecting the Reconsolidation of
Garlock Sealing Technologies
The historical business operations of Garlock Sealing Technologies LLC
(“GST LLC”) and The Anchor Packing Company (“Anchor”) resulted in a
substantial volume of asbestos litigation in which plaintiffs alleged
personal injury or death as a result of exposure to asbestos fibers.
Those subsidiaries manufactured and/or sold industrial sealing products,
predominately gaskets and packing, that contained encapsulated asbestos
fibers. Anchor is an inactive and insolvent indirect subsidiary of
Coltec Industries Inc (“Coltec”). EnPro’s subsidiaries’ exposure to
asbestos litigation and their relationships with insurance carriers have
been managed through another Coltec subsidiary, Garrison Litigation
Management Group, Ltd. (“Garrison”). GST LLC, Anchor and Garrison are
collectively referred to as “GST.”
On June 5, 2010 (the “Petition Date”), GST filed voluntary petitions for
reorganization under Chapter 11 of the United States Bankruptcy Code in
the U.S. Bankruptcy Court for the Western District of North Carolina in
Charlotte (the “Bankruptcy Court”). The filings were the initial step in
an asbestos claims resolution process, which is ongoing. The filings did
not include EnPro Industries, Inc., or any other EnPro Industries, Inc.
operating subsidiary.
The financial results of GST and its subsidiaries are included in our
consolidated results through June 4, 2010, the day prior to the Petition
Date. However, U.S. generally accepted accounting principles require an
entity that files for protection under the U.S. Bankruptcy Code, whether
solvent or insolvent, whose financial statements were previously
consolidated with those of its parent, as GST’s and its subsidiaries’
were with EnPro’s, generally must be prospectively deconsolidated from
the parent and the investment accounted for using the cost method.
Accordingly, the financial results of GST and its subsidiaries are not
included in EnPro’s consolidated results after June 4, 2010.
On January 14, 2015, EnPro announced that GST and it had reached
agreement with the court-appointed legal representative of future
asbestos claimants (the "Future Claimants' Representative") that
includes a second amended plan of reorganization (the “Amended Plan”).
The Amended Plan was filed with the Bankruptcy Court on January 14, 2015
and supersedes the prior plans filed by GST. If approved by the
Bankruptcy Court and implemented, the Amended Plan will provide
certainty and finality to the expenditures necessary to resolve all
current and future asbestos claims against GST and against its Garrison
and Anchor Packing subsidiaries. The Future Claimants' Representative
has agreed to support, recommend and vote in favor of the Amended Plan,
which provides payments to all claimants who have a compensable disease
and had meaningful contact with GST asbestos containing products.
The Amended Plan provides for (a) the treatment of present and future
asbestos claims against GST that have not been resolved by settlement or
verdict prior to the Petition Date, and (b) administrative and
litigation costs. The Amended Plan provides for the establishment of two
facilities—a settlement facility (which would receive $220.0 million
from GST and $30.0 million from Coltec, upon consummation of the Amended
Plan and additional contributions by GST aggregating $77.5 million over
the seven years following consummation of the Amended Plan) and a
litigation fund (which would receive $30.0 million from GST upon
consummation of the Amended Plan) to fund the defense and payment of
claims of claimants who elect to pursue litigation under the Amended
Plan rather than accept the settlement option under the Amended Plan.
Funds contained in the settlement facility and the litigation fund would
provide the exclusive remedies for current and future GST asbestos
claimants other than claimants whose claims had been resolved by
settlement or verdict prior to the Petition Date and were not paid prior
to the Petition Date. The Amended Plan provides that GST will pay in
full claims that had been resolved by settlement or verdict prior to the
Petition Date that were not paid prior to the Petition Date (with
respect to claims resolved by verdict, such payment will be made only to
the extent the verdict becomes final). The amount of such claims
resolved by verdict is $2.5 million. GST estimates the range of its
aggregate liability for such unpaid settled asbestos claims to be from
$3.1 million to $16.4 million, and the Amended Plan provides that if the
actual amount is less than $10.0 million GST will contribute the
difference to the settlement facility. In addition, the Amended Plan
provides that, during the 40-year period following confirmation of the
Amended Plan, GST would make supplementary annual contributions, subject
to specified maximum annual amounts that decline over the period, to
maintain a specified balance at specified dates of the litigation fund.
The maximum aggregate amount of all such contingent supplementary
contributions over that period is $132.0 million. GST believes that
initial contributions to the litigation fund may likely be sufficient to
permit the balance of that facility to exceed the specified thresholds
over the 40-year period and, accordingly, that the low end of a range of
reasonably possible loss associated with these contingent supplementary
contributions is $0.
The Amended Plan incorporates the Bankruptcy Court’s determination in
January 2014 that $125.0 million is sufficient to satisfy GST’s
aggregate liability for present and future mesothelioma claims; however,
it also provides additional funds to provide full payment for
non-mesothelioma claims and to gain the support of the Future Claimants’
Representative of the Amended Plan. Under the terms of the Amended Plan,
EnPro will retain 100% of the equity interests of GST LLC.
If the Amended Plan is confirmed by the Bankruptcy Court and is
consummated, GST will be re-consolidated with EnPro’s results for
financial reporting purposes. The Amended Plan is subject to
confirmation by the Bankruptcy Court and EnPro cannot assure you that
GST will be able to obtain necessary Bankruptcy Court approval of the
Amended Plan, including the settlement of asbestos claims and related
releases of claims against us included therein, and that the Amended
Plan will be consummated.
Confirmation and consummation of the Amended Plan are subject to a
number of risks and uncertainties, including the actions and decisions
of creditors and other third parties that have an interest in the
bankruptcy proceedings, delays in the confirmation or effective date of
the Amended Plan due to factors beyond GST's or EnPro’s control, which
would result in greater costs and the impairment of value of GST,
appeals and other challenges to the Amended Plan and risks and
uncertainties affecting GST and Coltec's ability to fund anticipated
contributions under the Amended Plan as a result of adverse changes in
their results of operations, financial condition and capital resources,
including as a result of economic factors beyond their control.
In light of the risks and uncertainties, including those noted above, we
believe the confirmation and consummation of the Amended Plan is
confirmable as presented to the bankruptcy court but is not currently
probable under Regulation S-X of the SEC and therefore, the
reconsolidation of GST LLC with EnPro’s results for financial reporting
purposes on the basis of confirmation and consummation of the Amended
Plan is not currently probable. Accordingly, pro forma financial
statements are not required by the SEC and the following pro forma
condensed consolidated financial information may not include all
information required to be included in pro forma financial statements
prepared in accordance with Regulation S-X of the SEC. EnPro is
providing the unaudited pro forma condensed consolidated financial
information which assumes the confirmation and consummation of the
Amended Plan for illustrative purposes only in light of specific
requests for such pro forma information by investors.
The unaudited pro forma condensed consolidated financial information
presented below has been prepared to illustrate the effects of the
reconsolidation of GST and its subsidiaries with EnPro assuming the
confirmation and consummation of the Amended Plan and is based upon the
historical balance sheet of EnPro as September 30, 2015, the estimated
fair value of assets and liabilities of GST as of September 30, 2015 and
the historical results of GST operations after consideration of the
adjustments to the fair value of assets and liabilities. The unaudited
pro forma condensed consolidated balance sheet as of September 30, 2015
gives effect to the reconsolidation as if it occurred on September 30,
2015. The unaudited pro forma condensed consolidated statements of
operations for the quarters ended September 30, 2015 and 2014 give
effect to the reconsolidation as if it had occurred on January 1, 2014.
Under generally accepted accounting principles, the reconsolidation of
GST requires that the tangible and intangible assets and liabilities of
GST be reflected at their estimated fair values. The preliminary fair
value amounts used in the unaudited pro forma condensed consolidated
financial information reflects management’s best estimates of fair
value. Upon completion of detailed valuation studies and the final
determination of fair value, EnPro may make additional adjustments to
the fair value allocation, which may differ significantly from the
valuations set forth in the unaudited pro forma condensed consolidated
financial information.
The unaudited pro forma condensed consolidated statements of operations
are based on estimates and assumptions, which have been made solely for
the purposes of developing such pro forma information. The unaudited pro
forma condensed consolidated statements of operations also include
certain adjustments such as increased depreciation and amortization
expense on tangible and intangible assets, increased interest expense on
the debt incurred to complete the reconsolidation as well as the tax
impacts related to these adjustments. The pro forma adjustments are
based upon available information and certain assumptions that EnPro
believes are reasonable.
The unaudited pro forma condensed consolidated financial information has
been presented for information purposes only and is not necessarily
indicative of what the consolidated company’s financial position or
results of operations actually would have been had the reconsolidation
been completed as of the dates indicated, nor is it necessarily
indicative of the future operating results or financial position of the
consolidated company. Therefore, the actual amounts recorded at the date
the reconsolidation occurs may differ from the information presented
herein.
|
|
|
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|
|
|
|
|
|
|
|
EnPro Industries, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma Condensed Consolidated Statements of Operations
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarter Ended September 30, 2015
|
(Stated in Millions of Dollars, Except Per Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma
|
|
|
|
|
|
|
|
|
|
Pro Forma
|
|
Pro Forma
|
|
Adjustments
|
|
|
|
|
|
EnPro
|
|
GST
|
|
Adjustments
|
|
Consolidated
|
|
Reference
|
Net sales
|
|
|
$
|
306.6
|
|
|
$
|
54.0
|
|
|
$
|
(14.1
|
)
|
|
$
|
346.5
|
|
|
(1)
|
Cost of sales
|
|
|
|
205.2
|
|
|
|
33.8
|
|
|
|
(13.9
|
)
|
|
|
225.1
|
|
|
(1), (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
101.4
|
|
|
|
20.2
|
|
|
|
(0.2
|
)
|
|
|
121.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
|
74.8
|
|
|
|
10.6
|
|
|
|
3.0
|
|
|
|
88.4
|
|
|
(3)
|
|
Other
|
|
|
|
1.7
|
|
|
|
0.7
|
|
|
|
(1.0
|
)
|
|
|
1.4
|
|
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
|
76.5
|
|
|
|
11.3
|
|
|
|
2.0
|
|
|
|
89.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
24.9
|
|
|
|
8.9
|
|
|
|
(2.2
|
)
|
|
|
31.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
(12.9
|
)
|
|
|
(0.2
|
)
|
|
|
8.1
|
|
|
|
(5.0
|
)
|
|
(5)
|
Interest income
|
|
|
|
0.1
|
|
|
|
8.0
|
|
|
|
(8.1
|
)
|
|
|
-
|
|
|
(5)
|
Other income (expense)
|
|
|
|
0.1
|
|
|
|
(5.0
|
)
|
|
|
5.0
|
|
|
|
0.1
|
|
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
12.2
|
|
|
|
11.7
|
|
|
|
2.8
|
|
|
|
26.7
|
|
|
|
Income tax expense
|
|
|
|
(0.8
|
)
|
|
|
(5.1
|
)
|
|
|
(1.0
|
)
|
|
|
(6.9
|
)
|
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
11.4
|
|
|
$
|
6.6
|
|
|
$
|
1.8
|
|
|
$
|
19.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
$
|
0.52
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
$
|
0.90
|
|
|
|
Average common shares outstanding (millions)
|
|
|
|
22.0
|
|
|
|
|
|
|
|
22.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
|
$
|
0.51
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
$
|
0.90
|
|
|
|
Average common shares outstanding (millions)
|
|
|
|
22.1
|
|
|
|
|
|
|
|
22.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Eliminate intercompany sales of $14.1 million.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
Reflects the increase in depreciation expense of $0.2 million due
to adjusting property, plant and equipment to fair value. The
total fair value adjustment to property, plant and equipment was
$19.8 million of which $14.6 million related to depreciable
buildings and improvements and machinery and equipment that have a
net estimated remaining economic life of 14.1 years.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
Reflects the increase in amortization expense as a result of the
estimated fair value adjustment due to the creation of the
finite-lived intangible assets. The estimated useful life of the
finite-lived intangible assets is 15 years.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4)
|
Eliminate asbestos-related expenses which would cease upon
confirmation and consummation of the Second Amended Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
Eliminate intercompany interest.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6)
|
For purposes of the consolidated pro forma financial information,
the estimated effective tax rate of 36% has been used for all
periods presented to calculate the tax effect associated with the
pro forma adjustments.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EnPro Industries, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma Condensed Consolidated Statements of Operations
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended September 30, 2015
|
(Stated in Millions of Dollars, Except Per Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma
|
|
|
|
|
|
|
|
|
|
Pro Forma
|
|
Pro Forma
|
|
Adjustments
|
|
|
|
|
|
EnPro
|
|
GST
|
|
Adjustments
|
|
Consolidated
|
|
Reference
|
Net sales
|
|
|
$
|
882.5
|
|
|
$
|
165.2
|
|
|
$
|
(38.2
|
)
|
|
$
|
1,009.5
|
|
|
(1)
|
Cost of sales
|
|
|
|
590.0
|
|
|
|
102.2
|
|
|
|
(37.5
|
)
|
|
|
654.7
|
|
|
(1), (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
292.5
|
|
|
|
63.0
|
|
|
|
(0.7
|
)
|
|
|
354.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
|
226.2
|
|
|
|
33.0
|
|
|
|
8.8
|
|
|
|
268.0
|
|
|
(3)
|
|
Other
|
|
|
|
50.3
|
|
|
|
0.9
|
|
|
|
(1.3
|
)
|
|
|
49.9
|
|
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
|
276.5
|
|
|
|
33.9
|
|
|
|
7.5
|
|
|
|
317.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
16.0
|
|
|
|
29.1
|
|
|
|
(8.2
|
)
|
|
|
36.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
(39.0
|
)
|
|
|
(0.5
|
)
|
|
|
23.8
|
|
|
|
(15.7
|
)
|
|
(5)
|
Interest income
|
|
|
|
0.4
|
|
|
|
24.3
|
|
|
|
(23.8
|
)
|
|
|
0.9
|
|
|
(5)
|
Other expense
|
|
|
|
(4.2
|
)
|
|
|
(16.7
|
)
|
|
|
16.7
|
|
|
|
(4.2
|
)
|
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
|
(26.8
|
)
|
|
|
36.2
|
|
|
|
8.5
|
|
|
|
17.9
|
|
|
|
Income tax expense
|
|
|
|
(0.7
|
)
|
|
|
(12.6
|
)
|
|
|
(3.1
|
)
|
|
|
(16.4
|
)
|
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
(27.5
|
)
|
|
$
|
23.6
|
|
|
$
|
5.4
|
|
|
$
|
1.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share
|
|
|
$
|
(1.21
|
)
|
|
|
N/A
|
|
|
|
N/A
|
|
|
$
|
0.07
|
|
|
|
Average common shares outstanding (millions)
|
|
|
22.7
|
|
|
|
|
|
|
|
22.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per share
|
|
|
$
|
(1.21
|
)
|
|
|
N/A
|
|
|
|
N/A
|
|
|
$
|
0.06
|
|
|
|
Average common shares outstanding (millions)
|
|
|
22.7
|
|
|
|
|
|
|
|
23.7
|
|
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Eliminate intercompany sales of $38.2 million.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
Reflects the increase in depreciation expense of $0.7 million due
to adjusting property, plant and equipment to fair value. The
total fair value adjustment to property, plant and equipment was
$19.8 million of which $14.6 million related to depreciable
buildings and improvements and machinery and equipment that have a
net estimated remaining economic life of 14.1 years.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
Reflects the increase in amortization expense as a result of the
estimated fair value adjustment due to the creation of the
finite-lived intangible assets. The estimated useful life of the
finite-lived intangible assets is 15 years.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4)
|
Eliminate asbestos-related expenses which would cease upon
confirmation and consummation of the Second Amended Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
Eliminate intercompany interest.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6)
|
For purposes of the consolidated pro forma financial information,
the estimated effective tax rate of 36% has been used for all
periods presented to calculate the tax effect associated with the
pro forma adjustments.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7)
|
Represents shares that would no longer be antidilutive since the
pro-forma consolidated company would have net income.
|
|
|
|
|
|
|
|
|
|
|
|
|
EnPro Industries, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma Condensed Consolidated Statements of Operations
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarter Ended September 30, 2014
|
(Stated in Millions of Dollars, Except Per Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma
|
|
|
|
|
|
|
|
|
|
Pro Forma
|
|
Pro Forma
|
|
Adjustments
|
|
|
|
|
|
EnPro
|
|
GST
|
|
Adjustments
|
|
Consolidated
|
|
Reference
|
Net sales
|
|
|
$
|
302.6
|
|
|
$
|
61.1
|
|
|
$
|
(14.8
|
)
|
|
$
|
348.9
|
|
|
(1)
|
Cost of sales
|
|
|
|
196.4
|
|
|
|
37.4
|
|
|
|
(14.6
|
)
|
|
|
219.2
|
|
|
(1), (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
106.2
|
|
|
|
23.7
|
|
|
|
(0.2
|
)
|
|
|
129.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
|
77.4
|
|
|
|
12.5
|
|
|
|
3.0
|
|
|
|
92.9
|
|
|
(3)
|
|
Other
|
|
|
|
1.2
|
|
|
|
0.7
|
|
|
|
(0.7
|
)
|
|
|
1.2
|
|
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
|
78.6
|
|
|
|
13.2
|
|
|
|
2.3
|
|
|
|
94.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
27.6
|
|
|
|
10.5
|
|
|
|
(2.5
|
)
|
|
|
35.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
(10.8
|
)
|
|
|
(0.1
|
)
|
|
|
7.7
|
|
|
|
(3.2
|
)
|
|
(5)
|
Interest income
|
|
|
|
0.3
|
|
|
|
7.7
|
|
|
|
(7.7
|
)
|
|
|
0.3
|
|
|
(5)
|
Other expense
|
|
|
|
(4.0
|
)
|
|
|
(4.4
|
)
|
|
|
4.4
|
|
|
|
(4.0
|
)
|
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
13.1
|
|
|
|
13.7
|
|
|
|
1.9
|
|
|
|
28.7
|
|
|
|
Income tax expense
|
|
|
|
(4.5
|
)
|
|
|
(4.8
|
)
|
|
|
(0.7
|
)
|
|
|
(10.0
|
)
|
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
8.6
|
|
|
$
|
8.9
|
|
|
$
|
1.2
|
|
|
$
|
18.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
$
|
0.36
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
$
|
0.78
|
|
|
|
Average common shares outstanding (millions)
|
|
|
|
24.0
|
|
|
|
|
|
|
|
24.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
|
$
|
0.33
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
$
|
0.72
|
|
|
|
Average common shares outstanding (millions)
|
|
|
|
26.1
|
|
|
|
|
|
|
|
26.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Eliminate intercompany sales of $14.8 million.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
Reflects the increase in depreciation expense of $0.2 million due
to adjusting property, plant and equipment to fair value. The
total fair value adjustment to property, plant and equipment was
$19.8 million of which $14.6 million related to depreciable
buildings and improvements and machinery and equipment that have a
net estimated remaining economic life of 14.1 years.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
Reflects the increase in amortization expense as a result of the
estimated fair value adjustment due to the creation of the
finite-lived intangible assets. The estimated useful life of the
finite-lived intangible assets is 15 years.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4)
|
Eliminate asbestos-related expenses which would cease upon
confirmation and consummation of the Second Amended Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
Eliminate intercompany interest.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6)
|
For purposes of the consolidated pro forma financial information,
the estimated effective tax rate of 36% has been used for all
periods presented to calculate the tax effect associated with the
pro forma adjustments.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EnPro Industries, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma Condensed Consolidated Statements of Operations
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended September 30, 2014
|
(Stated in Millions of Dollars, Except Per Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma
|
|
|
|
|
|
|
|
|
|
Pro Forma
|
|
Pro Forma
|
|
Adjustments
|
|
|
|
|
|
EnPro
|
|
GST
|
|
Adjustments
|
|
Consolidated
|
|
Reference
|
Net sales
|
|
|
$
|
902.9
|
|
|
$
|
183.1
|
|
|
$
|
(42.8
|
)
|
|
$
|
1,043.2
|
|
|
(1)
|
Cost of sales
|
|
|
|
592.1
|
|
|
|
110.6
|
|
|
|
(42.1
|
)
|
|
|
660.6
|
|
|
(1), (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
310.8
|
|
|
|
72.5
|
|
|
|
(0.7
|
)
|
|
|
382.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
|
239.8
|
|
|
|
35.2
|
|
|
|
8.8
|
|
|
|
283.8
|
|
|
(3)
|
|
Other
|
|
|
|
1.9
|
|
|
|
(184.8
|
)
|
|
|
185.2
|
|
|
|
2.3
|
|
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
|
241.7
|
|
|
|
(149.6
|
)
|
|
|
194.0
|
|
|
|
286.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
69.1
|
|
|
|
222.1
|
|
|
|
(194.7
|
)
|
|
|
96.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
(32.3
|
)
|
|
|
(0.1
|
)
|
|
|
22.8
|
|
|
|
(9.6
|
)
|
|
(5)
|
Interest income
|
|
|
|
0.8
|
|
|
|
23.0
|
|
|
|
(22.8
|
)
|
|
|
1.0
|
|
|
(5)
|
Other expense
|
|
|
|
(10.7
|
)
|
|
|
(12.3
|
)
|
|
|
12.3
|
|
|
|
(10.7
|
)
|
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
26.9
|
|
|
|
232.7
|
|
|
|
(182.4
|
)
|
|
|
77.2
|
|
|
|
Income tax expense
|
|
|
|
(8.7
|
)
|
|
|
(82.5
|
)
|
|
|
65.7
|
|
|
|
(25.5
|
)
|
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
18.2
|
|
|
$
|
150.2
|
|
|
$
|
(116.7
|
)
|
|
$
|
51.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
$
|
0.80
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
$
|
2.28
|
|
|
|
Average common shares outstanding (millions)
|
|
|
|
22.7
|
|
|
|
|
|
|
|
22.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
|
$
|
0.71
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
$
|
2.01
|
|
|
|
Average common shares outstanding (millions)
|
|
|
|
25.7
|
|
|
|
|
|
|
|
25.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Eliminate intercompany sales of $42.8 million.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
Reflects the increase in depreciation expense of $0.7 million due
to adjusting property, plant and equipment to fair value. The
total fair value adjustment to property, plant and equipment was
$19.8 million of which $14.6 million related to depreciable
buildings and improvements and machinery and equipment that have a
net estimated remaining economic life of 14.1 years.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
Reflects the increase in amortization expense as a result of the
estimated fair value adjustment due to the creation of the
finite-lived intangible assets. The estimated useful life of the
finite-lived intangible assets is 15 years.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4)
|
Eliminate asbestos-related expenses which would cease upon
confirmation and consummation of the Second Amended Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
Eliminate intercompany interest.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6)
|
For purposes of the consolidated pro forma financial information,
the estimated effective tax rate of 36% has been used for all
periods presented to calculate the tax effect associated with the
pro forma adjustments.
|
|
|
|
|
|
|
|
EnPro Industries, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma Condensed Consolidated Balance Sheets (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2015
|
(Stated in Millions of Dollars)
|
|
|
|
|
|
|
|
|
|
Second
|
|
|
|
|
|
Pro Forma
|
|
|
|
|
|
|
|
|
|
Amended
|
|
Pro Forma
|
|
Pro Forma
|
|
Adjustments
|
|
|
|
|
|
EnPro
|
|
GST
|
|
Plan impact (1)
|
|
Adjustments
|
|
Consolidated
|
|
Reference
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and investments
|
|
|
$
|
92.0
|
|
$
|
263.3
|
|
$
|
(193.4
|
)
|
|
$
|
-
|
|
|
$
|
161.9
|
|
|
|
Accounts receivable
|
|
|
|
223.6
|
|
|
32.0
|
|
|
-
|
|
|
|
(23.9
|
)
|
|
|
231.7
|
|
(4)
|
|
Inventories
|
|
|
|
178.0
|
|
|
20.0
|
|
|
-
|
|
|
|
5.8
|
|
|
|
203.8
|
|
(2)
|
|
Notes receivable from EnPro
|
|
|
|
-
|
|
|
36.2
|
|
|
-
|
|
|
|
(36.2
|
)
|
|
|
-
|
|
(3)
|
|
Other current assets
|
|
|
|
52.3
|
|
|
46.4
|
|
|
-
|
|
|
|
(23.3
|
)
|
|
|
75.4
|
|
(4)
|
|
|
Total current assets
|
|
|
|
545.9
|
|
|
397.9
|
|
|
(193.4
|
)
|
|
|
(77.6
|
)
|
|
|
672.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment
|
|
|
|
210.9
|
|
|
42.4
|
|
|
-
|
|
|
|
19.8
|
|
|
|
273.1
|
|
(2)
|
Goodwill
|
|
|
|
196.6
|
|
|
18.2
|
|
|
-
|
|
|
|
(18.2
|
)
|
|
|
196.6
|
|
(2)
|
Other intangible assets
|
|
|
|
198.1
|
|
|
4.5
|
|
|
-
|
|
|
|
242.3
|
|
|
|
444.9
|
|
(2)
|
Investment in GST
|
|
|
|
236.9
|
|
|
-
|
|
|
-
|
|
|
|
(236.9
|
)
|
|
|
-
|
|
(6)
|
Notes receivable from EnPro
|
|
|
|
-
|
|
|
271.0
|
|
|
-
|
|
|
|
(271.0
|
)
|
|
|
-
|
|
(3)
|
Asbestos insurance receivable
|
|
|
|
-
|
|
|
62.0
|
|
|
(4.2
|
)
|
|
|
-
|
|
|
|
57.8
|
|
|
Deferred income taxes and income taxes receivable
|
|
|
|
107.6
|
|
|
97.7
|
|
|
(101.8
|
)
|
|
|
(94.0
|
)
|
|
|
9.5
|
|
(5)
|
Other assets
|
|
|
|
43.8
|
|
|
5.7
|
|
|
-
|
|
|
|
(1.1
|
)
|
|
|
48.4
|
|
(4)
|
|
|
Total assets
|
|
|
$
|
1,539.8
|
|
$
|
899.4
|
|
$
|
(299.4
|
)
|
|
$
|
(436.7
|
)
|
|
$
|
1,703.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings from GST
|
|
|
$
|
24.0
|
|
$
|
-
|
|
$
|
-
|
|
|
$
|
(24.0
|
)
|
|
$
|
-
|
|
(3)
|
|
Notes payable to GST
|
|
|
|
12.2
|
|
|
-
|
|
|
-
|
|
|
|
(12.2
|
)
|
|
|
-
|
|
(3)
|
|
Current maturities of long-term debt
|
|
|
|
2.3
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
2.3
|
|
|
|
Accounts payable
|
|
|
|
90.9
|
|
|
27.2
|
|
|
-
|
|
|
|
(23.9
|
)
|
|
|
94.2
|
|
(4)
|
|
Accrued expenses
|
|
|
|
134.0
|
|
|
10.2
|
|
|
-
|
|
|
|
(23.3
|
)
|
|
|
120.9
|
|
(4)
|
|
Deferred income taxes and income taxes payable
|
|
|
|
1.2
|
|
|
0.6
|
|
|
-
|
|
|
|
-
|
|
|
|
1.8
|
|
|
|
|
Total current liabilities
|
|
|
|
264.6
|
|
|
38.0
|
|
|
-
|
|
|
|
(83.4
|
)
|
|
|
219.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
376.7
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
376.7
|
|
|
Notes payable to GST
|
|
|
|
271.0
|
|
|
-
|
|
|
-
|
|
|
|
(271.0
|
)
|
|
|
-
|
|
(3)
|
Asbestos liability
|
|
|
|
30.0
|
|
|
339.1
|
|
|
(295.2
|
)
|
|
|
-
|
|
|
|
73.9
|
|
|
Deferred income taxes and income taxes payable
|
|
|
|
23.7
|
|
|
96.0
|
|
|
(1.6
|
)
|
|
|
(17.4
|
)
|
|
|
100.7
|
|
(5), (7)
|
Other liabilities
|
|
|
|
90.1
|
|
|
11.2
|
|
|
-
|
|
|
|
(1.1
|
)
|
|
|
100.2
|
|
(4)
|
|
|
Total liabilities
|
|
|
|
1,056.1
|
|
|
484.3
|
|
|
(296.8
|
)
|
|
|
(372.9
|
)
|
|
|
870.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity
|
|
|
|
483.7
|
|
|
415.1
|
|
|
(2.6
|
)
|
|
|
(63.8
|
)
|
|
|
832.4
|
|
(8)
|
|
|
Total liabilities and equity
|
|
|
$
|
1,539.8
|
|
$
|
899.4
|
|
$
|
(299.4
|
)
|
|
$
|
(436.7
|
)
|
|
$
|
1,703.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) We determined that the establishment of the settlement
facility and litigation facility contemplated by the Second
Amended Plan, payments of claims resolved by settlement or verdict
prior to the Petition Date that were not paid prior to the
Petition Date and other liabilities subject to compromise would be
funded by cash on hand. The existing deferred tax asset on the
asbestos liability was eliminated and a new deferred tax asset on
the remaining trust liability payments was established. The
asbestos insurance receivable , remaining payments required under
the settlement facility and the related tax effects were
discounted to their present value using a 6% discount rate. We
have not reflected any amounts for the contingent funding under
the litigation guarantee as we feel these will be largely
unnecessary. The maximum after-tax net present value of these
payments over 40 years would be $31 million.
|
(2) Upon reconsolidation, the assets and liabilities of GST will
need to be recognized at fair value. Inventory is valued at net
realizable value which required a $5.8 million adjustment to the
carrying value. We reflected a $19.8 million fair value
adjustment to property, plant and equipment. We eliminated GST's
pre-existing goodwill and other identifiable intangible assets of
$18.2 million and $4.5 million, respectively. We identified
finite-lived intangible assets with an estimated fair value
of $181.5 million. In addition, we identified $65.3 million of
indefinite-lived intangible assets. The carrying value of all
other assets and liabilities approximated fair value.
|
(3) Eliminate intercompany notes receivable/payable.
|
(4) Eliminate intercompany trade receivables/payables ,
intercompany interest receivable/payable and other intercompany
receivables/payables.
|
(5) Eliminate $94.0 million of intercompany income taxes payable.
|
(6) Eliminate the investment in GST which is carried at
historical cost.
|
(7) The elimination of the deferred tax liability on the
investment in GST and establish a deferred tax liability on the
step-up in fair value of assets resulted in a net increase in
long-term tax liabilities of $76.6 million.
|
(8) The entries above resulted in reflecting a $348.7 million
after-tax gain upon reconsolidation.
|
|
|
|
|
|
|
|
|
|
|
|
EnPro Industries, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Pro Forma Adjusted EBITDA to Pro Forma Net
Income (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Quarters and Nine Months Ended September 30, 2015 and 2014
|
(Stated in Millions of Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended
|
|
|
Nine Months Ended
|
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma earnings before interest, income taxes, depreciation,
amortization and other selected items (pro forma adjusted EBITDA):
|
|
|
$
|
53.0
|
|
|
$
|
55.7
|
|
|
|
$
|
148.2
|
|
|
$
|
156.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to arrive at pro forma earnings before interest,
income taxes, depreciation and amortization (pro forma EBITDA):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring costs
|
|
|
|
(1.1
|
)
|
|
|
(0.6
|
)
|
|
|
|
(2.7
|
)
|
|
|
(1.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on exchange and repurchase of convertible debentures
|
|
|
|
-
|
|
|
|
(4.0
|
)
|
|
|
|
(2.8
|
)
|
|
|
(10.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill and other intangible asset impairment
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(47.0
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition expenses
|
|
|
|
(0.5
|
)
|
|
|
(0.1
|
)
|
|
|
|
(2.2
|
)
|
|
|
(0.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value adjustment to acquisition date inventory
|
|
|
|
(0.3
|
)
|
|
|
-
|
|
|
|
|
(1.3
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Environmental reserve adjustment
|
|
|
|
(0.8
|
)
|
|
|
-
|
|
|
|
|
(1.0
|
)
|
|
|
(0.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
0.7
|
|
|
|
(0.4
|
)
|
|
|
|
(0.6
|
)
|
|
|
(0.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma EBITDA
|
|
|
|
51.0
|
|
|
|
50.6
|
|
|
|
|
90.6
|
|
|
|
143.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to arrive at pro forma net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
|
(5.0
|
)
|
|
|
(2.9
|
)
|
|
|
|
(14.8
|
)
|
|
|
(8.6
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
|
(6.9
|
)
|
|
|
(10.0
|
)
|
|
|
|
(16.4
|
)
|
|
|
(25.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense
|
|
|
|
(19.3
|
)
|
|
|
(19.0
|
)
|
|
|
|
(57.9
|
)
|
|
|
(57.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma net income
|
|
|
$
|
19.8
|
|
|
$
|
18.7
|
|
|
|
$
|
1.5
|
|
|
$
|
51.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The foregoing table provides a reconciliation of pro forma net
income set forth in the accompanying unaudited pro forma condensed
consolidated statements of operations reflecting reconsolidation
of GST to pro forma earnings before interest, income taxes,
depreciation, amortization and other selected items (adjusted
EBITDA). The methodology for reconciliation is the same as
presented on the table titled "Reconciliation of Adjusted EBITDA
to Net Income (Unaudited)".
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20151029005413/en/
Copyright Business Wire 2015