Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 27, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-31225 | |
Entity Registrant Name | ENPRO INDUSTRIES, INC | |
Entity Incorporation, State or Country Code | NC | |
Entity Tax Identification Number | 01-0573945 | |
Entity Address, Street | 5605 Carnegie Boulevard | |
Entity Address, Suite | Suite 500 | |
Entity Address, City | Charlotte | |
Entity Address, State | NC | |
Entity Address, Postal Zip Code | 28209 | |
City Area Code | 704 | |
Local Phone Number | 731-1500 | |
Title of each class | Common stock, $0.01 par value | |
Trading Symbol(s) | NPO | |
Name of each exchange on which registered | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 20,802,827 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001164863 | |
Current Fiscal Year End Date | --12-31 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Net sales | $ 280.1 | $ 209.7 | $ 827.3 | $ 627.7 |
Cost of sales | 169.3 | 126 | 509.5 | 378.3 |
Gross profit | 110.8 | 83.7 | 317.8 | 249.4 |
Operating expenses: | ||||
Selling, general and administrative | 65.8 | 60 | 205.1 | 182.5 |
Other | 0.1 | 0.1 | 2.3 | 1.9 |
Total operating expenses | 65.9 | 60.1 | 207.4 | 184.4 |
Operating income | 44.9 | 23.6 | 110.4 | 65 |
Interest expense | (9.4) | (4) | (24.2) | (12) |
Interest income | 0.1 | 1.4 | 0.3 | 1.8 |
Other income (expense) | 0.3 | 16.7 | (1.7) | 18.6 |
Income from continuing operations before income taxes | 35.9 | 37.7 | 84.8 | 73.4 |
Income tax expense | (9.1) | (13.6) | (19.8) | (14.8) |
Income from continuing operations | 26.8 | 24.1 | 65 | 58.6 |
Income from discontinued operations, net of tax | 0.7 | 3.9 | 13.9 | 16.9 |
Net income | 27.5 | 28 | 78.9 | 75.5 |
Less: net income attributable to redeemable non-controlling interests | 0.6 | 0.1 | 0.8 | 0.1 |
Net income attributable to EnPro Industries, Inc. | 26.9 | 27.9 | 78.1 | 75.4 |
Comprehensive income (loss) | (5.6) | 26.9 | 17.2 | 78.4 |
Less: comprehensive income (loss) attributable to redeemable non-controlling interests | (1.2) | 0.2 | (3.1) | 0.3 |
Comprehensive income (loss) attributable to EnPro Industries, Inc. | (4.4) | 26.7 | 20.3 | 78.1 |
Income attributable to EnPro Industries, Inc. common shareholders: | ||||
Income from continuing operations, net of tax | 26.2 | 24 | 64.2 | 58.5 |
Income from discontinued operations, net of tax | 0.7 | 3.9 | 13.9 | 16.9 |
Net income attributable to EnPro Industries, Inc. | $ 26.9 | $ 27.9 | $ 78.1 | $ 75.4 |
Basic earnings per share attributable to EnPro Industries, Inc.: | ||||
Continuing operations (in dollars per share) | $ 1.26 | $ 1.17 | $ 3.09 | $ 2.84 |
Discontinued operations (in dollars per share) | 0.03 | 0.19 | 0.67 | 0.82 |
Net income per share (in dollars per share) | 1.29 | 1.36 | 3.76 | 3.66 |
Diluted earnings per share attributable to EnPro Industries, Inc.: | ||||
Continuing operations (in dollars per share) | 1.26 | 1.16 | 3.08 | 2.82 |
Discontinued operations (in dollars per share) | 0.03 | 0.19 | 0.66 | 0.81 |
Net income per share (in dollars per share) | $ 1.29 | $ 1.35 | $ 3.74 | $ 3.63 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
OPERATING ACTIVITIES OF CONTINUING OPERATIONS | ||
Net income | $ 78.9 | $ 75.5 |
Adjustments to reconcile net income to net cash provided by operating activities of continuing operations: | ||
Income from discontinued operations, net of taxes | (13.9) | (16.9) |
Depreciation | 19.4 | 13.4 |
Amortization | 58.5 | 33.3 |
Deferred income taxes | (1.9) | (2.7) |
Stock-based compensation | 4.6 | 3.4 |
Other non-cash adjustments | 4.9 | (15.2) |
Change in assets and liabilities, net of effects of divestitures of businesses: | ||
Accounts receivable, net | (17) | (21.8) |
Inventories | (19.2) | (7) |
Accounts payable | 2.7 | 10.4 |
Other current assets and liabilities | (13.2) | 2.6 |
Other non-current assets and liabilities | 7.8 | 2.5 |
Net cash provided by operating activities of continuing operations | 111.6 | 77.5 |
INVESTING ACTIVITIES OF CONTINUING OPERATIONS | ||
Purchases of property, plant and equipment | (10.2) | (10.9) |
Proceeds from sale of businesses, net | 0.6 | 38.9 |
Acquisitions | 2.9 | 0 |
Receipts from settlements of derivative contracts | 27.4 | 0 |
Other | 0 | 0.2 |
Net cash provided by investing activities of continuing operations | 20.7 | 28.2 |
FINANCING ACTIVITIES OF CONTINUING OPERATIONS | ||
Proceeds from debt | 60.5 | 0 |
Repayments of debt | (304.2) | (3) |
Dividends paid | (17.6) | (16.8) |
Other | (7.8) | (1.5) |
Net cash used in financing activities of continuing operations | (269.1) | (21.3) |
CASH FLOWS OF DISCONTINUED OPERATIONS | ||
Operating cash flows | 8.8 | 20.3 |
Investing cash flows | (4.3) | (2.3) |
Net cash provided by discontinued operations | 4.5 | 18 |
Effect of exchange rate changes on cash and cash equivalents | (39.6) | (1.9) |
Net increase (decrease) in cash and cash equivalents | (171.9) | 100.5 |
Cash and cash equivalents at beginning of period | 338.1 | 229.5 |
Cash and cash equivalents at end of period | 166.2 | 330 |
Cash paid during the period for: | ||
Interest, net | 15.8 | 6.3 |
Income taxes, net | 35.8 | 22.8 |
Non-cash investing and financing activities: | ||
Non-cash acquisitions of property, plant, and equipment | $ 0.2 | $ 1.2 |
CONSOLIDATED BALANCE SHEETS (UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 166.2 | $ 338.1 |
Accounts receivable, net | 151.4 | 145 |
Inventories | 150.2 | 135.9 |
Prepaid expenses and other current assets | 34.4 | 35.8 |
Current assets of discontinued operations | 148.4 | 149.9 |
Total current assets | 650.6 | 804.7 |
Property, plant and equipment, net | 170.5 | 184.3 |
Goodwill | 919.2 | 948 |
Other intangible assets | 811.5 | 894.2 |
Other assets | 142.8 | 143.4 |
Total assets | 2,694.6 | 2,974.6 |
Current liabilities | ||
Current maturities of long-term debt | 15.5 | 12.7 |
Short-term debt | 0 | 149.3 |
Accounts payable | 72.9 | 72 |
Accrued expenses | 129.1 | 116.5 |
Current liabilities of discontinued operations | 35.8 | 35.8 |
Total current liabilities | 253.3 | 386.3 |
Long-term debt | 868.1 | 963.9 |
Deferred taxes and non-current income taxes payable | 148.8 | 166.1 |
Other liabilities | 107.6 | 137.9 |
Total liabilities | 1,377.8 | 1,654.2 |
Commitments and contingencies | ||
Redeemable non-controlling interests | 49 | 50.1 |
Shareholders’ equity | ||
Common stock – $.1 par value; 100,000,000 shares authorized; issued, 20,981,810 shares in 2022 and 20,915,793 shares in 2021 | 0.2 | 0.2 |
Additional paid-in capital | 300.7 | 303.6 |
Retained earnings | 1,011.4 | 953.1 |
Accumulated other comprehensive income (loss) | (43.3) | 14.6 |
Common stock held in treasury, at cost – 179,833 shares in 2022 and 180,848 shares in 2021 | (1.2) | (1.2) |
Total shareholders’ equity | 1,267.8 | 1,270.3 |
Total liabilities and equity | $ 2,694.6 | $ 2,974.6 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in usd per share) | $ 0.1 | $ 0.1 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 20,981,810 | 20,915,793 |
Treasury stock, common, shares (in shares) | 179,833 | 180,848 |
Overview and Basis of Presentat
Overview and Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Overview and Basis of Presentation | Overview and Basis of Presentation Overview EnPro Industries, Inc. (“we,” “us,” “our,” “EnPro,” or the “Company”) is a leading-edge industrial technology company focused on critical applications across a diverse group of growing end markets such as semiconductor, photonics, industrial process, aerospace, food, biopharma and life sciences. EnPro is a leader in applied engineering and designs, develops, manufactures, and markets proprietary, value-added products and solutions that safeguard a variety of critical environments. Over the past several years, we have executed several strategic initiatives to focus the portfolio of businesses where we offer proprietary, industrial technology-related products and solutions with high barriers to entry, compelling margins, strong cash flow, and perpetual recurring/aftermarket revenue in markets with favorable secular tailwinds. Basis of Presentation The accompanying interim consolidated financial statements are unaudited, and certain related information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted in accordance with Rule 10-01 of Regulation S-X. They were prepared following the same policies and procedures used in the preparation of our annual financial statements except for the change in the accounting for inventory from Last-in, First-out basis (LIFO) to First-in, First-out basis (FIFO) at certain of our locations as described below under "Inventory". The accompanying interim consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of results for the periods presented. The Consolidated Balance Sheet as of December 31, 2021 was derived from the audited financial statements included in our annual report on Form 10-K for the year ended December 31, 2021 adjusted for the change in accounting principle noted above. The results of operations for the interim periods are not necessarily indicative of the results for the fiscal year. These consolidated financial statements should be read in conjunction with our annual consolidated financial statements for the year ended December 31, 2021 included within our annual report on Form 10-K. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amount of assets and liabilities and the disclosures regarding contingent assets and liabilities at period end and the reported amounts of revenue and expenses during the reporting period. All intercompany accounts and transactions between our consolidated operations have been eliminated. Goodwill In the second quarter of 2022, we determined the performance of our Alluxa reporting unit to be a triggering event for a goodwill impairment test and, as a result, we performed an interim assessment. The fair value of our Alluxa reporting unit, which is included in our Advanced Surface Technologies segment, and is allocated $126.0 million of goodwill, exceeded its carrying value by an estimated 21% as of the interim testing date of June 30, 2022. If the weighted-average cost of capital used in this assessment were increased by one percentage point, then the fair value of the Alluxa reporting unit would exceed its carrying value by approximately 12%. Management continues to monitor the actual financial performance and future expectations of Alluxa, as well as, the discount rate and other relevant factors compared to the rates and projections utilized for the interim goodwill test noted above. Management will perform the annual goodwill impairment test for EnPro’s five reporting units as of November 1, 2022. In performing the impairment tests, a change in assumptions used in the test, such as a change in discount rate, a downward revision of financial projections, or a shift in market multiples could result in the fair value of a reporting unit dropping below the carrying value of its assets, resulting in an impairment of goodwill. Inventory Effective July 1, 2022, we changed our method of determining cost for certain inventories from a LIFO basis to a FIFO basis for all of our inventories that were still accounted for under LIFO. We concluded the FIFO basis of accounting is the preferable method for determining inventory cost for our businesses because it improves comparability with our peers, harmonizes our accounting for inventory across all locations, more accurately reflects the current value and physical flow of inventory, and aligns operationally with how management views the performance of the business. We retrospectively applied this change in accounting principle to all prior periods, including discontinued operations; and recorded a cumulative effect adjustment to increase the January 1, 2021 inventory balance by $3.2 million, an increase to the January 1, 2021 current assets of discontinued operations balance by $0.6 million, and an increase to retained earnings by $2.9 million (net of tax). The Consolidated Statement of Operations for the quarter and nine months ended September 30, 2021, Consolidated Statement of Cash flows for the nine months ended September 30, 2021, and the Consolidated Balance Sheet at December 31, 2021 have been retrospectively adjusted to reflect the change in accounting principle. Had we continued to apply LIFO, cost of sales for the nine months ended September 30, 2022, would have been $3.1 million higher and inventory would have been $6.9 million lower. Additionally, income from discontinued operations, net of tax, would have been approximately $0.1 million lower and current assets of discontinued operations would have been approximately $1.2 million lower. The impact of our change in accounting method for valuing certain inventories on our previously issued financial statements is presented in the following tables: Consolidated Statement of Operations (in millions) Quarter Ended September 30, 2021 Nine Months Ended September 30, 2021 As Reported 1 Effect of Change As Adjusted As Reported 1 Effect of Change As Adjusted Cost of sales $ 126.0 $ — $ 126.0 $ 378.5 $ (0.2) $ 378.3 Gross profit 83.7 — 83.7 249.2 0.2 249.4 Operating income 23.6 — 23.6 64.8 0.2 65.0 Income from continuing operations before income taxes 37.7 — 37.7 73.2 0.2 73.4 Income tax expense (13.6) — (13.6) (14.8) — (14.8) Income from continuing operations 24.1 — 24.1 58.4 0.2 58.6 Income from discontinued operations, net of tax 3.5 0.4 3.9 16.5 0.4 16.9 Net income 27.6 0.4 28.0 74.9 0.6 75.5 Net income attributable to EnPro Industries, Inc. $ 27.5 $ 0.4 $ 27.9 $ 74.8 $ 0.6 $ 75.4 Consolidated Balance Sheet (in millions) December 31, 2021 As Reported 1 Effect of Change As Adjusted Inventories $ 132.1 $ 3.8 $ 135.9 Current assets of discontinued operations 148.9 1.0 149.9 Total current assets 799.9 4.8 804.7 Total assets $ 2,969.8 $ 4.8 $ 2,974.6 Current liabilities of discontinued operations $ 35.5 $ 0.3 $ 35.8 Total current liabilities 386.0 0.3 386.3 Deferred taxes and non-current income taxes payable 165.2 0.9 166.1 Total liabilities 1,653.0 1.2 1,654.2 Retained earnings 949.5 3.6 953.1 Total shareholders' equity 1,266.7 3.6 1,270.3 Total liabilities and equity $ 2,969.8 $ 4.8 $ 2,974.6 Consolidated Statement of Cash Flows (in millions) Nine Months Ended September 30, 2021 As Reported 1 Effect of Change As Adjusted OPERATING ACTIVITIES OF CONTINUING OPERATIONS Net income $ 74.9 $ 0.6 $ 75.5 Adjustments to reconcile net income to net cash provided by operating activities of continuing operations: Income from discontinued operations, net of taxes (16.5) (0.4) (16.9) Change in assets and liabilities, net of effects of divestitures of businesses: Inventories (6.8) (0.2) (7.0) Net cash provided by operating activities of continuing operations 77.5 — 77.5 1 As Reported represents the consolidated financial statement balances that have been recast for discontinued operations exclusive of the impact of our change in accounting method from LIFO to FIFO. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations During the third quarter of 2022, we entered into an agreement to sell our GGB business and announced our intention to sell Garlock Pipeline Technologies, Inc. (GPT). These businesses, along with Compressor Products International (CPI), which was divested on December 21, 2021, comprised our entire Engineered Materials segment ("Engineered Materials"). As a result of classifying the GGB and GPT businesses as held for sale in the third quarter of 2022, we determined Engineered Materials to be discontinued operations. Accordingly, we have reported, for all periods presented, the financial condition, results of operations, and cash flows of Engineered Materials as discontinued operations in the accompanying financial statements. For the quarters and nine months ended September 30, 2022 and 2021, the results of operations from Engineered Materials were as follows: (in millions) Quarters Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net sales $ 51.8 $ 73.4 $ 166.6 $ 233.3 Cost of sales 34.9 47.0 109.1 146.0 Gross profit 16.9 26.4 57.5 87.3 Operating expenses: Selling, general and administrative 13.0 19.9 39.3 60.5 Other — 0.9 0.2 3.4 Total operating expenses 13.0 20.8 39.5 63.9 Operating income 3.9 5.6 18.0 23.4 Other expense — (0.1) — (0.1) Income from discontinued operations before income tax 3.9 5.5 18.0 23.3 Income tax expense (3.2) (1.6) (4.1) (6.4) Income from discontinued operations, net of tax $ 0.7 $ 3.9 $ 13.9 $ 16.9 The major classes of assets and liabilities for Engineered Materials are shown below: (in millions) September 30, December 31, Assets: Accounts receivable $ 36.0 $ 32.0 Inventories 27.1 28.8 Property, plant and equipment 46.0 52.4 Goodwill 5.1 5.1 Other intangible assets 16.9 19.2 Other assets 17.3 12.4 Current assets of discontinued operations $ 148.4 $ 149.9 Liabilities Accounts payable $ 10.1 $ 9.9 Accrued expenses 19.0 18.8 Other liabilities 6.7 7.1 Current liabilities of discontinued operations $ 35.8 $ 35.8 Pursuant to applicable accounting guidance for the reporting of discontinued operations, allocations to Engineered Materials for corporate services not expected to continue at the divested business subsequent to closing have not been reflected in the above financial statements of discontinued operations and have been reclassified to income from continuing operations in the accompanying consolidated financial statements of the Company for all periods. In addition, divestiture-related costs previously not allocated to Engineered Materials that were incurred as a result of the divestiture of Engineered Materials have been reflected in the financial results of discontinued operations. As a result, income before income taxes of Engineered Materials has been decreased by $1.1 million and $1.6 million, respectively, for the quarter and nine months ended September 30, 2022 and increased by $0.1 million and $1.5 million, respectively, for the quarter and nine months ended September 30, 2021, with offsetting changes in corporate expenses of continuing operations. The sale of GGB closed on November 4, 2022 to The Timken Company for total proceeds of $305 million, subject to closing date purchase price adjustments. The pre-tax gain on the disposition of GGB to be recognized in the fourth quarter is expected to be approximately $190 million. The Company is actively pursuing the sale of GPT, and anticipates completing the sale by December 31, 2022. Current assets and current liabilities of discontinued operations of GPT at September 30, 2022, were $16.3 million and $4.2 million respectively. |
Acquisition
Acquisition | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisition | Acquisition On December 17, 2021, our subsidiary, EnPro Holdings, Inc. ("EnPro Holdings"), completed the acquisition of all issued and outstanding membership interests of TCFII NxEdge LLC (“NxEdge”). Based in Boise, Idaho, NxEdge serves customers across the semiconductor supply chain, including top tier global integrated device manufacturers and original equipment manufacturers from six main facilities located in Idaho and California. With vertically integrated capabilities across the semiconductor value chain, including a robust aftermarket business, NxEdge is a leading supplier offering a set of integrated capabilities with unique processes resulting in a broad range of qualifications at top customers. NxEdge is included in our Advanced Surface Technologies segment. The following pro forma condensed consolidated financial results of operations for EnPro are presented as if the acquisition had been completed prior to 2021: Quarter Ended September 30, Nine Months Ended September 30, (in millions) 2022 2021 2022 2021 Pro forma net sales $ 280.1 $ 256.0 $ 827.3 $ 762.1 Pro forma net income $ 28.1 $ 31.6 $ 76.2 $ 76.6 These amounts have been calculated after applying our accounting policies and adjusting the results of NxEdge to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to inventory, property, plant and equipment and intangible assets had been applied prior to 2021 as well as additional interest expense to reflect financing required, together with the corresponding tax effects. The supplemental pro forma net income for the quarter and nine months ended September 30, 2022 was adjusted to exclude $1.8 million and $14.9 million of pre-tax costs related to the amortization of the backlog intangible asset, the amortization of the fair-value adjustment to acquisition date inventory and additional transaction-related expenses incurred during the respective periods. These pro forma financial results have been prepared for comparative purposes only and do not reflect the effect of synergies that would have been expected to result from the integration of this acquisition. The pro forma information does not purport to be indicative of the results of operations that actually would have resulted had the acquisition occurred prior to 2021, or of future results of the consolidated entities. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our income tax expense and resulting effective tax rate on income from continuing operations are based upon the estimated annual effective tax rates applicable for the respective periods adjusted for the effect of items required to be treated as discrete in the interim periods. This estimated annual effective tax rate is affected by the relative proportions of revenue and income before taxes in the jurisdictions in which we operate. Based on the geographical mix of earnings, our annual effective tax rate fluctuates based on the portion of our profits earned in each jurisdiction. Additionally, in accordance with discontinued operations reporting requirements, income tax expense for the current and prior periods presented have been adjusted to reflect only the activity of continuing operations. This presentation requires removing all elements of income tax expense associated with discontinued operations entities as well as their indirect impact on the overall income tax provision. The effective tax rates for the quarters ended September 30, 2022 and 2021 were 25.4% and 36.2%, respectively. The reduction in the effective tax rate for the three months ended September 30, 2022 is primarily the result of higher tax rates in most foreign jurisdictions. The effective tax rates for the nine months ended September 30, 2022 and 2021 were 23.4% and 20.2%, respectively. The effective tax rate for the nine months ended September 30, 2022 is primarily driven by a legal entity conversion in Taiwan and favorable foreign currency effects on dividends, partially offset by higher tax rates in most foreign jurisdictions. The effective tax rate for the nine months ended September 30, 2021 is primarily the result of the reduction of a valuation allowance on certain foreign net operating losses, the favorable conclusion of the IRS examination, and the reversal of certain uncertain tax positions, partially offset by higher tax rates in most foreign jurisdictions. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Quarters Ended Nine Months Ended September 30, 2022 2021 2022 2021 (in millions, except per share amounts) Numerator (basic and diluted): Net income $ 26.8 $ 24.1 $ 65.0 $ 58.6 Less: net income attributable to redeemable non-controlling interests 0.6 0.1 0.8 0.1 Income from continuing operations attributable to EnPro Industries, Inc. 26.2 24.0 64.2 58.5 Income from discontinued operations, net of tax 0.7 3.9 13.9 16.9 Net income attributable to EnPro Industries, Inc. $ 26.9 $ 27.9 $ 78.1 $ 75.4 Denominator: Weighted-average shares – basic 20.8 20.6 20.8 20.6 Share-based awards 0.1 0.1 0.1 0.2 Weighted-average shares – diluted 20.9 20.7 20.9 20.8 Basic earnings per share attributable to EnPro Industries, Inc.: Continuing operations $ 1.26 $ 1.17 $ 3.09 $ 2.84 Discontinued operations 0.03 0.19 0.67 0.82 Basic earnings per share attributable to EnPro Industries, Inc. $ 1.29 $ 1.36 $ 3.76 $ 3.66 Diluted earnings per share attributable to EnPro Industries, Inc.: Continuing operations $ 1.26 $ 1.16 $ 3.08 $ 2.82 Discontinued operations 0.03 0.19 0.66 0.81 Diluted earnings per share attributable to EnPro Industries, Inc. $ 1.29 $ 1.35 $ 3.74 $ 3.63 |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories September 30, December 31, (in millions) Finished products $ 49.4 $ 45.0 Work in process 35.0 38.8 Raw materials and supplies 65.8 52.1 Total inventories $ 150.2 $ 135.9 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The changes in the net carrying value of goodwill by reportable segment for the nine months ended September 30, 2022, are as follows: Sealing Advanced Surface Technologies Total (in millions) Goodwill as of December 31, 2021 $ 279.4 $ 668.6 $ 948.0 Acquisition of business — 0.4 0.4 Reclassification to held for sale (other current assets) (6.0) — (6.0) Foreign currency translation (8.8) (14.4) (23.2) Goodwill as of September 30, 2022 $ 264.6 $ 654.6 $ 919.2 The goodwill balances reflected above are net of accumulated impairment losses of $27.8 million for the Sealing Technologies segment as of December 31, 2021, and September 30, 2022. Identifiable intangible assets are as follows: As of September 30, 2022 As of December 31, 2021 Gross Accumulated Gross Accumulated (in millions) Amortized: Customer relationships $ 476.1 $ 148.7 $ 503.4 $ 132.9 Existing technology 462.7 62.5 464.9 37.3 Trademarks 63.8 21.6 63.9 19.5 Other 36.2 25.0 36.9 17.9 1,038.8 257.8 1,069.1 207.6 Indefinite-Lived: Trademarks 30.5 — 32.7 — Total $ 1,069.3 $ 257.8 $ 1,101.8 $ 207.6 Amortization for the quarters and nine months ended September 30, 2022 and 2021 were $19.2 million, $10.7 million, $57.9 million, and $32.2 million, respectively. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses September 30, December 31, (in millions) Salaries, wages and employee benefits $ 52.9 $ 50.5 Interest 9.9 4.9 Environmental 11.0 11.0 Income taxes 15.3 9.3 Taxes other than income taxes 7.0 7.0 Operating lease liabilities 8.7 9.5 Other 24.3 24.3 $ 129.1 $ 116.5 |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Senior Secured Credit Facilities On December 17, 2021, we entered into a Third Amended and Restated Credit Agreement (the “Amended Credit Agreement”) among the Company and EnPro Holdings, as borrowers, certain foreign subsidiaries of the Company from time to time party thereto, as designated borrowers, the guarantors party thereto, the lenders party thereto and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer. The Amended Credit Agreement amends, restates and replaces the Second Amended and Restated Credit Agreement dated as of June 28, 2018, as amended, among the Company and EnPro Holdings as borrowers, the guarantors party thereto, the lenders party thereto and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer. The Amended Credit Agreement provides for credit facilities in the initial aggregate principal amount of $1,007.5 million, consisting of a five-year, senior secured revolving credit facility of $400.0 million (the “Revolving Credit Facility”), a $142.5 million senior secured term loan facility in replacement of our existing senior secured term loan facility, maturing September 25, 2024 (the “Term Loan A-1 Facility”), a five-year, senior secured term loan facility of $315.0 million (the “Term Loan A-2 Facility”) and a 364-day, senior secured term loan facility of $150.0 million (the “364-Day Facility” and together with the Revolving Credit Facility, the Term Loan A-1 Facility and the Term Loan A-2 Facility, the “Facilities”). The Amended Credit Agreement also provides that we may seek incremental term loans and/or additional revolving credit commitments in an amount equal to the greater of $275.0 million and 100% of consolidated EBITDA for the most recently ended four-quarter period for which we have reported financial results, plus additional amounts based on a consolidated senior secured leverage ratio. The Amended Credit Agreement became effective on December 17, 2021. Initially, borrowings under the Facilities (other than the 364-Day Facility) bear interest at an annual rate of LIBOR plus 1.75% or base rate plus 0.75%, although these interest rates are subject to incremental increase or decrease based on a consolidated total net leverage ratio. Borrowings under the 364-Day Facility bear interest at an annual rate of LIBOR plus 1.50% or base rate plus 0.50%. In addition, a commitment fee accrues with respect to the unused amount of the Revolving Credit Facility at an annual rate of 0.225%, which rate is also subject to incremental increase or decrease based on a consolidated total net leverage ratio. The Amended Credit Agreement contains customary LIBOR replacement provisions. The Term Loan A-1 Facility amortizes on a quarterly basis in an annual amount equal to 2.50% of the original principal amount of the Term Loan A-1 Facility ($150.0 million) in year one after the closing, 5.00% of such original principal amount in year two and 1.25% of such original principal amount in each of the first three quarters of year three, with the remaining outstanding principal amount payable at maturity. The Term Loan A-2 Facility amortizes on a quarterly basis in an annual amount equal to 2.5% of the original principal amount of the Term Loan A-2 Facility in each of years one through three, 5.0% of such original principal amount in year four and 1.25% of such original principal amount in each of the first three quarters of year five, with the remaining outstanding principal amount payable at maturity. The 364-Day Facility did not amortize and was repaid in full in the third quarter of 2022. The Facilities are subject to prepayment with the net cash proceeds of certain asset sales, casualty or condemnation events and non-permitted debt issuances. The Company and EnPro Holdings are the permitted borrowers under the Facilities. The Company may also from time to time designate any of its wholly owned foreign subsidiaries as a borrower under the Revolving Credit Facility. Each of the Company’s domestic subsidiaries (other than any subsidiaries that may be designated as “unrestricted” by the Company from time to time, and inactive subsidiaries) is required to guarantee the obligations of the borrowers under the Facilities, and each of the Company’s existing domestic subsidiaries (other than inactive subsidiaries) has entered into the Amended Credit Agreement to provide such a guarantee. Borrowings under the Facilities are secured by a first-priority pledge of certain assets. The Amended Credit Agreement contains certain financial covenants and required financial ratios including a maximum consolidated total net leverage and a minimum consolidated interest coverage as defined in the Amended Credit Agreement. We were in compliance with all covenants of the Amended Credit Agreement as of September 30, 2022. The borrowing availability under our Revolving Credit Facility at September 30, 2022 was $299.2 million after giving consideration to $10.8 million of outstanding letters of credit and $90.0 million of outstanding borrowings. The balance of our outstanding Term Loan A-1 Facility and Term Loan A-2 Facility at September 30, 2022 was $138.8 million and $309.1 million respectively. The 364-Day Facility had no outstanding balance at September 30, 2022. Senior Notes On October 17, 2018, we completed the offering of $350.0 million aggregate principal amount of 5.75% Senior Notes due 2026 (the "Senior Notes") and applied the net proceeds of that offering, together with borrowings under the Revolving Credit Facility, to redeem on October 31, 2018 the full $450.0 million aggregate principal amount of the outstanding 5.875% Senior Notes due 2022 (the "Old Notes"). The Senior Notes were issued to investors at 100% of the principal amount thereof. The Senior Notes are unsecured, unsubordinated obligations of EnPro and mature on October 15, 2026. Interest on the Senior Notes accrues at a rate of 5.75% per annum and is payable semi-annually in cash in arrears on April 15 and October 15 of each year. The Senior Notes are required to be guaranteed on a senior unsecured basis by each of EnPro’s existing and future direct and indirect domestic subsidiaries that is a borrower under, or guarantees, our indebtedness under the Revolving Credit Facility or guarantees any other Capital Markets Indebtedness (as defined in the indenture governing the Senior Notes) of EnPro or any of the guarantors. On or after October 15, 2021, we may, on any one or more occasions, redeem all or a part of the Senior Notes at specified redemption prices plus accrued and unpaid interest. Each holder of the Senior Notes may require us to repurchase some or all of the Senior Notes held by such holder for cash upon the occurrence of a defined “change of control” event. Our ability to redeem the Senior Notes prior to maturity is subject to certain conditions, including in certain cases the payment of make-whole amounts. |
Pensions and Postretirement Ben
Pensions and Postretirement Benefits | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Pensions and Postretirement Benefits | Pensions and Postretirement Benefits The components of net periodic benefit cost for our U.S. and foreign defined benefit pension plans for the quarters and nine months ended September 30, 2022 and 2021, are as follows: Quarters Ended September 30, Nine Months Ended September 30, Pension Benefits Other Benefits Pension Benefits Other Benefits 2022 2021 2022 2021 2022 2021 2022 2021 (in millions) Service cost $ 0.4 $ 0.4 $ — $ — $ 1.1 $ 1.2 $ — $ — Interest cost 2.5 2.3 — 7.4 6.8 — 0.1 Expected return on plan assets (3.3) (4.5) — — (9.9) (13.6) — — Amortization of prior service cost — — — — 0.1 — — Amortization of net loss 0.1 0.2 0.1 0.1 0.4 0.5 0.1 0.1 Net periodic benefit cost (benefit) $ (0.3) $ (1.6) $ 0.1 $ 0.1 $ (1.0) $ (5.0) $ 0.1 $ 0.2 |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders' Equity Changes in shareholders' equity for the nine months ended September 30, 2022 are as follows: Common Stock Additional Paid-in Capital Retained Earnings 1 Accumulated Other Comprehensive Income Treasury Stock Total Shareholders' Equity Redeemable Non-controlling Interests (in millions, except per share data) Shares Amount Balance December 31, 2021 20.7 $ 0.2 $ 303.6 $ 953.1 $ 14.6 $ (1.2) $ 1,270.3 $ 50.1 Net income — — — 16.8 — — 16.8 0.3 Other comprehensive loss — — — — (11.7) — (11.7) (1.0) Dividends ($0.28 per share) — — — (5.9) — — (5.9) — Incentive plan activity 0.1 — (4.1) — — — (4.1) — Other — — 0.1 — — — 0.1 (0.1) Balance, March 31, 2022 20.8 0.2 299.6 964.0 2.9 (1.2) 1265.5 49.3 Net income (loss) — — — 34.4 — — 34.4 (0.1) Other comprehensive loss — — — — (14.9) — (14.9) (1.1) Dividends ($0.28 per share) — — — (5.9) — (5.9) — Incentive plan activity — — 1.4 — — — 1.4 — Balance, June 30, 2022 20.8 0.2 301.0 992.5 (12.0) (1.2) 1,280.5 48.1 Net income — — — 26.9 — — 26.9 0.6 Other comprehensive loss — — — — (31.3) — (31.3) (1.8) Dividends ($0.28 per share) — — — (5.8) — — (5.8) — Incentive plan activity — — 0.6 — — — 0.6 — Other — — (0.9) (2.2) — — (3.1) 2.1 Balance, September 30, 2022 20.8 $ 0.2 $ 300.7 $ 1,011.4 $ (43.3) $ (1.2) $ 1,267.8 $ 49.0 Changes in shareholders' equity for the nine months ended September 30, 2021 are as follows: Common Stock Additional Paid-in Capital Retained Earnings 1 Accumulated Other Comprehensive Loss Treasury Stock Total Shareholders' Equity Redeemable Non-controlling Interests (in millions, except per share data) Shares Amount Balance,December 31, 2020 20.5 $ 0.2 $ 289.6 $ 797.7 $ (4.9) $ (1.2) $ 1,081.4 $ 48.4 Net income — — — 18.0 — — 18.0 0.1 Other comprehensive loss — — — — (7.9) — (7.9) (0.5) Dividends ($0.27 per share) — — — (5.7) — — (5.7) — Incentive plan activity 0.1 — 1.2 — — — 1.2 — Other — — (0.1) (3.1) — — (3.2) 3.2 Balance, March 31, 2021 20.6 0.2 290.7 806.9 (12.8) (1.2) 1,083.8 51.2 Net income (loss) — — — 29.5 — — 29.5 (0.1) Other comprehensive income — — — — 11.8 — 11.8 0.6 Dividends ($0.27 per share) — — — (5.6) — (5.6) — Incentive plan activity — — 1.6 — — — 1.6 — Other — — (0.1) 0.2 — — 0.1 (0.1) Balance, June 30, 2021 20.6 0.2 292.2 831.0 (1.0) (1.2) 1,121.2 51.6 Net income — — — 27.9 — — 27.9 0.1 Other comprehensive income (loss) — — — — (1.2) — (1.2) 0.2 Dividends ($0.27 per share) — — — (5.6) — — (5.6) — Other (1.0) 2.9 1.9 (1.9) Balance, September 30, 2021 20.6 $ 0.2 $ 291.2 $ 856.2 $ (2.2) $ (1.2) $ 1,144.2 $ 50.0 1 Retained earnings balances and net income for the quarter ended June 30, 2022, and all prior quarterly periods have been recast to reflect the impact of the change in accounting method from LIFO to FIFO for certain inventories, net of the related tax effect. (See Note 1, "Overview and Basis of Presentation" for additional details). We intend to declare regular quarterly cash dividends on our common stock, as determined by our board of directors, after taking into account our current and projected cash flows, earnings, financial position, debt covenants and other relevant factors. In accordance with the board of directors' declaration, total dividend payments of $17.6 million were made during the nine months ended September 30, 2022. In October 2022, our board of directors declared a dividend of $0.28 per share, payable on December 14, 2022 to all shareholders of record as of November 30, 2022. In October 2022, our board of directors authorized the expenditure of up to $50.0 million for the repurchase of our outstanding common shares through October 2024. We have not made any repurchases under this authorization or the prior two-year authorization which expired in October 2022. In February 2022, we issued stock options to certain key executives for 0.1 million common shares with an exercise price of $106.54 per share. The options vest pro-rata on the first, second and third anniversaries of the grant date, subject to continued employment. No options have a term greater than 10 years. We determine the fair value of stock options using the Black-Scholes option pricing formula as of the grant date. Key inputs into this formula include expected term, expected volatility, expected dividend yield, and the risk-free interest rate. This fair value is amortized on a straight line basis over the vesting period. The expected term represents the period that our stock options are expected to be outstanding, and is determined based on historical experience of similar awards, given the contractual terms of the awards, vesting schedules, and expectations of future employee behavior. The fair value of stock options reflects a volatility factor calculated using historical market data for EnPro's common stock. The time frame used was approximated as a six-year period from the grant date for the awards. The dividend assumption is based on our expectations as of the grant date. We base the risk-free interest rate on the yield to maturity at the time of the stock option grant on zero-coupon U.S. government bonds having a remaining life equal to the option's expected life. The option awards issued in 2022 had a fair value of $39.07 per share at their grant date. The following assumptions were used to estimate the fair value of the 2022 option awards: Average expected term 6 years Expected volatility 39.88 % Risk-free interest rate 1.89 % Expected dividend yield 1.05 % |
Business Segment Information
Business Segment Information | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Business Segment Information | Business Segment Information We aggregate our operating businesses into two reportable segments. The factors considered in determining our reportable segments are the economic similarity of the businesses, the nature of products sold, or solutions provided, the production processes and the types of customers and distribution methods. Our reportable segments are managed separately based on these differences. Our Sealing Technologies segment designs and manufactures value-added products and solutions that safeguard a variety of critical environments, including: metallic, non-metallic and composite material gaskets, dynamic seals, compression packing, resilient metal seals, elastomeric seals, custom-engineered mechanical seals for applications in the aerospace industry and other markets, hydraulic components, expansion joints, sanitary gaskets, hoses and fittings for the hygienic process industries, fluid transfer products for the pharmaceutical and biopharmaceutical industries, and heavy-duty commercial vehicle parts used in wheel-end and suspension components that customers rely upon to ensure safety on our roadways. These products are used in a variety of markets, including chemical and petrochemical processing, nuclear energy, food and biopharmaceutical processing, primary metal manufacturing, mining, water and waste treatment, heavy-duty trucking, aerospace, medical, filtration and semiconductor fabrication. In all of these industries, performance and durability of our proprietary products and solutions are vital for the safety and environmental protection of our customers processes. Many of our products and solutions are used in highly demanding applications oftentimes in incredibly harsh environments, e.g., where extreme temperatures, extreme pressures, corrosive environments, strict tolerances, and/or worn equipment create challenges for product performance. Sealing Technologies offers customers widely recognized applied engineering, innovation, process know how and enduring reliability, driving a lasting aftermarket for many of our solutions. Our Advanced Surface Technologies (AST) segment applies proprietary technologies, processes, and capabilities to deliver a highly differentiated suite of products and solutions for the most challenging applications in high growth markets. The segment’s products and solutions are used in highly demanding environments requiring performance, precision and repeatability, with a low tolerance for failure. The segment’s solutions include cleaning, coating, testing, refurbishment and verification for critical components and assemblies used in state-of-the-art advanced node semiconductor manufacturing equipment. It designs, manufactures and sells specialized optical filters and proprietary thin-film coatings for the most challenging applications in the industrial technology, life sciences, and semiconductor markets and complex front-end wafer processing sub-systems, new and refurbished electrostatic chuck pedestals, and edge-welded metal bellows for the semiconductor equipment industry and for critical applications in the space, aerospace and defense markets. In many instances, AST capabilities drive solutions that enable the maintenance of our customers’ processes through an entire life cycle. We measure operating performance based on segment earnings before interest, income taxes, depreciation, amortization, and other selected items ("Adjusted Segment EBITDA"), which is segment revenue reduced by operating expenses and other costs identifiable with the segment, excluding acquisition and divestiture expenses, restructuring costs, impairment charges, non-controlling interest compensation, amortization of the fair value adjustment to acquisition date inventory, and depreciation and amortization. Adjusted Segment EBITDA is not defined under GAAP and may not be comparable to similarly-titled measures used by other companies. Corporate expenses include general corporate administrative costs. Expenses not directly attributable to the segments, corporate expenses, net interest expense, gains and losses related to the sale of assets, and income taxes are not included in the computation of Adjusted Segment EBITDA. The accounting policies of the reportable segments are the same as those for EnPro. Non-controlling interest compensation allocation represents compensation expense associated with a portion of the rollover equity from the acquisitions of LeanTeq and Alluxa being subject to reduction for certain types of employment terminations of the sellers. This expense is recorded in selling, general, and administrative expenses on our Consolidated Statements of Operations and is directly related to the terms of the acquisitions. This expense will continue to be recognized as compensation expense over the term of the put and call options associated with the acquisitions unless certain employment terminations have occurred. Segment operating results and other financial data for the nine months ended September 30, 2022 and 2021 were as follows: Quarters Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (in millions) Sales Sealing Technologies $ 157.9 $ 146.9 $ 467.4 $ 455.9 Advanced Surface Technologies 122.5 64.3 360.7 178.2 280.4 211.2 828.1 634.1 Intersegment sales (0.3) (1.5) (0.8) (6.4) Total sales $ 280.1 $ 209.7 $ 827.3 $ 627.7 Adjusted Segment EBITDA Sealing Technologies $ 39.7 $ 34.5 $ 118.1 $ 111.0 Advanced Surface Technologies 39.9 19.4 112.6 52.3 $ 79.6 $ 53.9 $ 230.7 $ 163.3 Reconciliation of Adjusted Segment EBITDA to income before income taxes Adjusted Segment EBITDA $ 79.6 $ 53.9 $ 230.7 $ 163.3 Acquisition and divestiture expenses — (0.3) (0.4) (0.4) Non-controlling interest compensation allocation 0.6 (1.3) 0.1 (4.1) Amortization of fair value adjustment to acquisition date inventory (1.0) (1.0) (12.3) (5.8) Restructuring and impairment expense (0.1) 0.2 (1.2) (1.8) Depreciation and amortization expense (25.7) (15.4) (77.7) (46.5) Corporate expenses (9.1) (11.6) (31.4) (37.2) Interest expense, net (9.3) (2.6) (23.9) (10.2) Other income (expense), net 0.9 15.8 0.9 16.1 Income before income taxes $ 35.9 $ 37.7 $ 84.8 $ 73.4 As a result of our change from the LIFO to FIFO inventory valuation as discussed in Note 1, Sealing Technologies Adjusted Segment EBITDA was recast to reflect the change. Accordingly, Sealing Technologies Adjusted Segment EBITDA for the nine months ended September 30, 2021 increased by approximately $0.2 million as a result of this change in accounting principle. Segment assets are as follows: September 30, 2022 December 31, 2021 (in millions) Sealing Technologies $ 694.9 $ 703.9 Advanced Surface Technologies 1,591.5 1,686.5 Corporate 259.8 434.3 Discontinued operations 148.4 149.9 $ 2,694.6 $ 2,974.6 Backlog As of September 30, 2022, the aggregate amount of transaction price of remaining performance obligations, or backlog, on a consolidated basis was $335.0 million. Approximately 93% of these obligations are expected to be satisfied within one year. There is no certainty these orders will result in actual sales at the times or in the amounts ordered. In addition, for most of our business, this total is not particularly predictive of future performance because of our short lead times and some seasonality. Revenue by End Market Due to the diversified nature of our business and the wide array of products that we offer, we sell into a number of end markets. Underlying economic conditions within these markets are a major driver of our segments' sales performance. Below is a summary of our third-party sales by major end market with which we did business for the quarters and nine months ended September 30, 2022 and 2021: Quarter Ended September 30, 2022 (in millions) Sealing Technologies Advanced Surface Technologies Total Aerospace $ 10.9 $ 1.5 $ 12.4 Automotive 0.6 0.5 1.1 Chemical and material processing 19.1 — 19.1 Food and pharmaceutical 17.6 — 17.6 General industrial 40.0 6.8 46.8 Medium-duty/heavy-duty truck 51.7 — 51.7 Oil and gas 5.5 1.6 7.1 Power generation 8.7 — 8.7 Semiconductors 1.9 111.5 113.4 Other 1.6 0.6 2.2 Total third-party sales $ 157.6 $ 122.5 $ 280.1 Quarter Ended September 30, 2021 (in millions) Sealing Technologies Advanced Surface Technologies Total Aerospace $ 8.4 $ 2.6 $ 11.0 Automotive 0.6 0.2 0.8 Chemical and material processing 17.5 — 17.5 Food and pharmaceutical 16.8 — 16.8 General industrial 40.9 7.2 48.1 Medium-duty/heavy-duty truck 43.2 — 43.2 Oil and gas 4.6 1.0 5.6 Power generation 8.4 0.1 8.5 Semiconductors 3.3 52.5 55.8 Other 1.8 0.6 2.4 Total third-party sales $ 145.5 $ 64.2 $ 209.7 Nine Months Ended September 30, 2022 (in millions) Sealing Technologies Advanced Surface Technologies Total Aerospace $ 29.7 $ 4.6 $ 34.3 Automotive 1.7 1.3 3.0 Chemical and material processing 59.1 — 59.1 Food and pharmaceutical 55.1 — 55.1 General industrial 123.5 21.2 144.7 Medium-duty/heavy-duty truck 139.9 — 139.9 Oil and gas 16.1 3.3 19.4 Power generation 31.6 0.1 31.7 Semiconductors 4.4 327.8 332.2 Other 5.6 2.3 7.9 Total third-party sales $ 466.7 $ 360.6 $ 827.3 Nine Months Ended September 30, 2021 (in millions) Sealing Technologies Advanced Surface Technologies Total Aerospace $ 23.4 $ 7.1 $ 30.5 Automotive 1.6 0.7 2.3 Chemical and material processing 54.1 — 54.1 Food and pharmaceutical 49.8 — 49.8 General industrial 128.5 19.4 147.9 Medium-duty/heavy-duty truck 129.7 — 129.7 Oil and gas 14.2 3.4 17.6 Power generation 29.1 0.1 29.2 Semiconductors 13.4 145.3 158.7 Other 5.9 2.0 7.9 Total third-party sales $ 449.7 $ 178.0 $ 627.7 |
Derivatives and Hedging
Derivatives and Hedging | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging | Derivatives and Hedging In September 2018, we entered into cross-currency swap agreements (the "Original Swap") with a notional amount of $200.0 million to manage foreign currency risk by effectively converting a portion of the interest payments related to our fixed-rate U.S. Dollar (“USD”)-denominated Senior Notes, including the semi-annual interest payments thereunder, to interest payments on fixed-rate Euro-denominated debt of 172.8 million EUR with a weighted average interest rate of 2.8%, with interest payment dates of March 15 and September 15 of each year. The Original Swap matured on September 15, 2022. At settlement, we received $30.8 million in cash, of which $27.4 million represented the fair value of the contracts as of the settlement date and $3.4 million represented interest receivable. Unrealized gains totaling $20.8 million, net of tax, as of the maturity date are included in accumulated other comprehensive income. In May 2019, we entered into additional cross-currency swap agreements (the "Additional Swap") with a notional amount of $100.0 million to manage an increased portion of our foreign currency risk by effectively converting a portion of the interest payments related to our fixed-rate USD-denominated Senior Notes, including the semi-annual interest payments thereunder, to interest payments on fixed-rate Euro-denominated debt of 89.6 million EUR with a weighted average interest rate of 3.5%, with interest payment dates of April 15 and October 15 of each year. The Additional Swap agreement matures on October 15, 2026. During the term of the Additional Swap agreement, we will receive semi-annual payments from the counterparties due to the difference between the interest rate on the Senior Notes and the interest rate on the Euro debt underlying the Additional Swap. There was no principal exchange at the inception of the arrangement, and there will be no exchange at maturity. At maturity (or earlier at our option), we and the counterparty will settle the Additional Swap agreement at its fair value in cash based on the aggregate notional amount and the then-applicable currency exchange rate compared to the exchange rate at the time the Additional Swap agreement was entered into. We have designated the Additional Swap as a qualifying hedging instruments and are accounting for it as a net investment hedge. At September 30, 2022, the fair value of the Additional Swap equaled $15.8 million and was recorded within our other (non-current) assets on the Consolidated Balance Sheet.The gains and losses resulting from fair value adjustment to the Additional Swap agreement, excluding interest accruals related to the above receipts, are recorded in accumulated other comprehensive income within our cumulative foreign currency translation adjustment, as the Additional Swap is effective in hedging the designated risk. Cash flows related to the Additional Swap are included in operating activities in the Consolidated Statements of Cash Flows, aside from the ultimate settlement at maturity with the counterparty, which will be included in investing activities. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Assets and liabilities measured at fair value on a recurring basis are summarized as follows: Fair Value Measurements as of September 30, 2022 December 31, 2021 (in millions) Assets Foreign currency derivatives 15.8 8.7 Deferred compensation assets 9.6 10.9 $ 25.4 $ 19.6 Liabilities Deferred compensation liabilities $ 9.9 $ 11.4 Our deferred compensation assets and liabilities are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. Our foreign currency derivatives are classified as Level 2 since their value is calculated based upon observable inputs including market USD/Euro exchange rates and market interest rates. The carrying values of our significant financial instruments reflected in the Consolidated Balance Sheets approximated their respective fair values except for the following instruments: September 30, 2022 December 31, 2021 Carrying Fair Carrying Fair (in millions) Long-term debt $ 883.6 $ 870.1 $ 976.6 $ 998.3 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive (Loss) | Accumulated Other Comprehensive Income (Loss) Changes in accumulated other comprehensive income (loss) by component (after tax) for the quarter ended September 30, 2022 are as follows: (in millions) Unrealized Pension and Total Beginning balance $ 19.9 $ (31.9) $ (12.0) Other comprehensive loss before reclassifications (33.3) — (33.3) Amounts reclassified from accumulated other comprehensive loss — 0.2 0.2 Net current-period other comprehensive income (loss) (33.3) 0.2 (33.1) Less: other comprehensive loss attributable to redeemable non-controlling interests (1.8) — (1.8) Net current-period other comprehensive income (loss) attributable to EnPro Industries, Inc. (31.5) 0.2 (31.3) Ending balance $ (11.6) $ (31.7) $ (43.3) Changes in accumulated other comprehensive income (loss) by component (after tax) for the quarter ended September 30, 2021 are as follows: (in millions) Unrealized Pension and Total Beginning balance $ 35.3 $ (36.3) $ (1.0) Other comprehensive loss before reclassifications (1.2) — (1.2) Amounts reclassified from accumulated other comprehensive loss — 0.2 0.2 Net current-period other comprehensive income (loss) (1.2) 0.2 (1.0) Less: other comprehensive income attributable to redeemable non-controlling interests 0.2 — 0.2 Net current-period other comprehensive income (loss) attributable to EnPro Industries, Inc. (1.4) 0.2 (1.2) Ending balance $ 33.9 $ (36.1) $ (2.2) Changes in accumulated other comprehensive income (loss) by component (after tax) for the nine months ended September 30, 2022 are as follows: (in millions) Unrealized Pension and Total Beginning balance $ 46.7 $ (32.1) $ 14.6 Other comprehensive loss before reclassifications (62.1) (62.1) Amounts reclassified from accumulated other comprehensive income — 0.4 0.4 Net current-period other comprehensive income (loss) (62.1) 0.4 (61.7) Less: other comprehensive loss attributable to redeemable non-controlling interests (3.8) — (3.8) Net current-period other comprehensive income (loss) attributable to EnPro Industries, Inc. (58.3) 0.4 (57.9) Ending balance $ (11.6) $ (31.7) $ (43.3) Changes in accumulated other comprehensive income (loss) by component (after tax) for the nine months ended September 30, 2021 are as follows: (in millions) Unrealized Pension and Total Beginning balance $ 31.7 $ (36.6) $ (4.9) Other comprehensive income before reclassifications 2.5 — 2.5 Amounts reclassified from accumulated other comprehensive loss — 0.5 0.5 Net current-period other comprehensive income 2.5 0.5 3.0 Less: other comprehensive income attributable to redeemable non-controlling interests 0.3 — 0.3 Net current-period other comprehensive income attributable to EnPro Industries, Inc. 2.2 0.5 2.7 Ending balance $ 33.9 $ (36.1) $ (2.2) Reclassifications out of accumulated other comprehensive income (loss) for the nine months ended September 30, 2022 and 2021 are as follows: Details about Accumulated Other Comprehensive Income (Loss) Components Amount Reclassified from Accumulated Other Affected Statement of Quarters Ended Nine Months Ended (in millions) 2022 2021 2022 2021 Pension and other postretirement plans adjustments: Actuarial losses $ 0.2 $ 0.3 $ 0.5 $ 0.6 (1) Prior service costs — — — 0.1 (1) Total before tax 0.2 0.3 0.5 0.7 Income before income taxes Tax benefit — (0.1) (0.1) (0.2) Income tax expense Net of tax $ 0.2 $ 0.2 $ 0.4 $ 0.5 Net income (1) These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension cost. As these are components of net periodic pension cost other than service cost, the affected Statement of Operations captions are other income (expense) (See Note 10, “Pensions and Postretirement Benefits" ” for additional details). |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies General A description of certain environmental and other legal matters relating to certain of our subsidiaries is included in this section. In addition to the matters noted herein, we are from time to time subject to, and are presently involved in, other litigation and legal proceedings arising in the ordinary course of business. We believe the outcome of such other litigation and legal proceedings will not have a material adverse effect on our financial condition, results of operations and cash flows. Expenses for administrative and legal proceedings are recorded when incurred. Environmental Our facilities and operations are subject to federal, state and local environmental and occupational health and safety laws and regulations of the U.S. and foreign countries. We take a proactive approach in our efforts to comply with these laws and regulations as they relate to our manufacturing operations and in proposing and implementing any remedial plans that may be necessary. We also regularly conduct comprehensive environmental, health and safety audits at our facilities to maintain compliance and improve operational efficiency. Although we believe past operations were in substantial compliance with the then applicable regulations, we or one or more of our subsidiaries are involved with various remediation activities or an investigation to determine responsibility for environmental conditions at 19 sites. At 12 of these sites, the future cost per site for us or our subsidiary is expected to exceed $100,000. Of these 19 sites, 17 are sites where we or one or more of our subsidiaries formerly conducted business operations but no longer do, and 2 are sites where we conduct manufacturing operations. Investigations have been completed for 16 sites and are in progress at 3 sites. An investigation to determine responsibility for environmental conditions is ongoing at one site. Our policy is to accrue environmental investigation and remediation costs when it is probable that a liability has been incurred and the amount can be reasonably estimated. For sites with multiple future projected cost scenarios for identified feasible investigation and remediation options where no one estimate is more likely than all the others, our policy is to accrue the lowest estimate among the range of estimates. The measurement of the liability is based on an evaluation of currently available facts with respect to each individual situation and takes into consideration factors such as existing technology, presently enacted laws and regulations and prior experience in the remediation of similar contaminated sites. Liabilities are established for all sites based on these factors. As assessments and remediation progress at individual sites, these liabilities are reviewed and adjusted to reflect additional technical data and legal information. As of September 30, 2022 and December 31, 2021, we had accrued liabilities aggregating $37.9 million and $46.4 million, respectively, for estimated future expenditures relating to environmental contingencies. The current portion of our aggregate environmental liability at September 30, 2022 was $11.0 million. These amounts have been recorded on an undiscounted basis in the Consolidated Balance Sheets. Given the uncertainties regarding the status of laws, regulations, enforcement policies, the impact of other parties potentially being fully or partially liable, technology and information related to individual sites, we do not believe it is possible to develop an estimate of the range of reasonably possible environmental loss in excess of our recorded liabilities. We believe that our accruals for specific environmental liabilities are adequate based on currently available information. Based upon limited information regarding any incremental remediation or other actions that may be required at these sites, we cannot estimate any further loss or a reasonably possible range of loss related to these matters. Actual costs to be incurred in future periods may vary from estimates because of the inherent uncertainties in evaluating environmental exposures due to unknown and changing conditions, changing government regulations and legal standards regarding liability. Lower Passaic River Study Area Based on our prior ownership of Crucible Steel Corporation a/k/a Crucible, Inc. (“Crucible”), we may have additional contingent liabilities in one or more significant environmental matters. One such matter, which is included in the 19 sites referred to above, is the Lower Passaic River Study Area of the Diamond Alkali Superfund Site in New Jersey. Crucible operated a steel mill abutting the Passaic River in Harrison, New Jersey from the 1930s until 1974, which was one of many industrial operations on the river dating back to the 1800s. Certain contingent environmental liabilities related to this site were retained by a predecessor of EnPro Holdings when it sold a majority interest in Crucible Materials Corporation (the successor of Crucible) in 1985. The United States Environmental Protection Agency (the “EPA”) notified our subsidiary in September 2003 that it is a potentially responsible party (“PRP”) for Superfund response actions in the lower 17-mile stretch of the Passaic River known as the Lower Passaic River Study Area. EnPro Holdings and approximately 70 of the numerous other PRPs, known as the Cooperating Parties Group, are parties to a May 2007 Administrative Order on Consent with the EPA to perform a Remedial Investigation/Feasibility Study (“RI/FS”) of the contaminants in the Lower Passaic River Study Area. In September 2018, EnPro Holdings withdrew from the Cooperating Parties Group but remains a party to the May 2007 Administrative Order on Consent. The RI/FS was completed and submitted to the EPA at the end of April 2015. The RI/FS recommends a targeted dredge and cap remedy with monitored natural recovery and adaptive management for the Lower Passaic River Study Area. The cost of such remedy is estimated to be $726 million. Previously, on April 11, 2014, the EPA released its Focused Feasibility Study (the “FFS”) with its proposed plan for remediating the lower eight miles of the Lower Passaic River Study Area. The FFS calls for bank-to-bank dredging and capping of the riverbed of that portion of the river and estimates a range of the present value of aggregate remediation costs of approximately $953 million to approximately $1.73 billion, although estimates of the costs and the timing of costs are inherently imprecise. On March 3, 2016, the EPA issued the final Record of Decision (ROD) as to the remedy for the lower eight miles of the Lower Passaic River Study Area, with the maximum estimated cost being reduced by the EPA from $1.73 billion to $1.38 billion, primarily due to a reduction in the amount of cubic yards of material that will be dredged. In October 2016, Occidental Chemical Corporation, the successor to the entity that operated the Diamond Alkali chemical manufacturing facility, reached an agreement with the EPA to develop the design for this proposed remedy at an estimated cost of $165 million. The EPA has estimated that it will take approximately four years to develop this design. On June 30, 2018, Occidental Chemical Corporation sued over 120 parties, including the Company, in the United States District Court for New Jersey seeking recovery of response costs under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"). No final allocations of responsibility have been made among the numerous PRPs that have received notices from the EPA, there are numerous identified PRPs that have not yet received PRP notices from the EPA, and there are likely many PRPs that have not yet been identified. On April 14, 2021, the EPA issued its proposed remedy for the upper nine miles of the river, with an estimated present value cost of approximately $441 million. The proposed remedy would involve dredging and capping of the river sediment as an interim remedy followed by a period of monitoring to evaluate the response of the river system to the interim remedy. When the EPA initiated the allocation process in 2017, it explained that a fair, carefully structured, information-based allocation was necessary to promote settlements. With the completion of the allocation process, in the second quarter of 2021 the EPA began settlement negotiations with the parties that participated in the allocation process, including EnPro. In September 2022, EnPro paid $5.9 million as part of a settlement between those parties and EPA. The payment will be held in escrow until court approval of the settlement. Our reserve for this site at September 30, 2022 was $0.7 million. Further adjustments to our reserve for this site are possible as new or additional information becomes available. Except with respect to the Lower Passaic River Study Area, we are unable to estimate a reasonably possible range of loss related to any other contingent environmental liability based on our prior ownership of Crucible. See the section entitled “Crucible Steel Corporation a/k/a Crucible, Inc.” in this footnote for additional information. Arizona Uranium Mines EnPro Holdings has received notices from the EPA asserting that it is a potentially responsible party under the CERCLA as the successor to a former operator of eight uranium mines in Arizona. The former operator conducted operations at the mines from 1954 to 1957. In the 1990s, remediation work performed by others at these sites consisted of capping the exposed areas of the mines. We have previously reserved amounts of probable loss associated with these mines, principally including the cost of the investigative work to be conducted at such mines. We entered into an Administrative Settlement Agreement and Order on Consent for Interim Removal Action with the EPA effective November 7, 2017 for the performance of this work. We entered into a First Modification of Original Administrative Settlement Agreement and Order on Consent effective July 8, 2022 for the performance of Engineering Evaluations and Cost Analyses of potential remedial options at each of the sites. In 2020, EPA initiated group discussions with EnPro Holdings and other potentially responsible parties to resolve various technical issues, including the development of cleanup standards. Based on these discussions and subsequent discussions with other responsible parties with similar sites, we have concluded that further remedial work beyond maintenance of and minor repairs to the existing caps is probable, and we have evaluated the feasibility of various remediation scenarios. Our reserve at September 30, 2022 for this site was $13.3 million, which reflects the low end of the range of our reasonably likely liability with respect to these sites. We are not able at this time to estimate the upper end of a range of liability with respect to these sites. On October 18, 2021, the United States District Court for the District of Arizona approved and entered a Consent Decree pursuant to which the U.S government will reimburse the Company for 35% of necessary costs of response, as defined in 42 U.S.C. section 9601(25), previously or to be in the future incurred by the Company which arise out of or in connection with releases or threatened releases of hazardous substances at or emanating from the mine sites. We expect future contributions of $3.3 million from the U.S. government towards remediation of the site. This amount was included in other assets in the accompanying consolidated balance sheet at September 30, 2022. Crucible Steel Corporation a/k/a Crucible, Inc. Crucible, which was engaged primarily in the manufacture and distribution of high technology specialty metal products, was a wholly owned subsidiary of EnPro Holdings until 1983 when its assets and liabilities were distributed to a new subsidiary, Crucible Materials Corporation. EnPro Holdings sold a majority of the outstanding shares of Crucible Materials Corporation in 1985 and divested its remaining minority interest in 2004. Crucible Materials Corporation filed for Chapter 11 bankruptcy protection in May 2009 and is no longer conducting operations. We have certain ongoing obligations, which are included in other liabilities in our Consolidated Balance Sheets, including workers’ compensation, retiree medical and other retiree benefit matters, in addition to those mentioned previously related to EnPro Holdings' period of ownership of Crucible. Based on EnPro Holdings' prior ownership of Crucible, we may have certain additional contingent liabilities, including liabilities in one or more significant environmental matters included in the matters discussed in “Environmental” above. We are investigating these matters. Except with respect to those matters for which we have an accrued liability as discussed in "Environmental" above, we are unable to estimate a reasonably possible range of loss related to these contingent liabilities. Warranties We provide warranties on many of our products. The specific terms and conditions of these warranties vary depending on the product and the market in which the product is sold. We record a liability based upon estimates of the costs we may incur under our warranties after a review of historical warranty experience and information about specific warranty claims. Adjustments are made to the liability as claims data, historical experience, and trends result in changes to our estimate. Changes in the product warranty liability for the nine months ended September 30, 2022 and 2021 are as follows: 2022 2021 (in millions) Balance at beginning of year $ 4.9 $ 6.5 Net charges to expense 0.9 1.4 Settlements made (0.8) (2.0) Balance at end of period $ 5.0 $ 5.9 |
Overview and Basis of Present_2
Overview and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying interim consolidated financial statements are unaudited, and certain related information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted in accordance with Rule 10-01 of Regulation S-X. They were prepared following the same policies and procedures used in the preparation of our annual financial statements except for the change in the accounting for inventory from Last-in, First-out basis (LIFO) to First-in, First-out basis (FIFO) at certain of our locations as described below under "Inventory". The accompanying interim consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of results for the periods presented. The Consolidated Balance Sheet as of December 31, 2021 was derived from the audited financial statements included in our annual report on Form 10-K for the year ended December 31, 2021 adjusted for the change in accounting principle noted above. The results of operations for the interim periods are not necessarily indicative of the results for the fiscal year. These consolidated financial statements should be read in conjunction with our annual consolidated financial statements for the year ended December 31, 2021 included within our annual report on Form 10-K. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amount of assets and liabilities and the disclosures regarding contingent assets and liabilities at period end and the reported amounts of revenue and expenses during the reporting period. All intercompany accounts and transactions between our consolidated operations have been eliminated. |
Inventory | Inventory Effective July 1, 2022, we changed our method of determining cost for certain inventories from a LIFO basis to a FIFO basis for all of our inventories that were still accounted for under LIFO. We concluded the FIFO basis of accounting is the preferable method for determining inventory cost for our businesses because it improves comparability with our peers, harmonizes our accounting for inventory across all locations, more accurately reflects the current value and physical flow of inventory, and aligns operationally with how management views the performance of the business. |
Overview and Basis of Present_3
Overview and Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Accounting Standards Update and Change in Accounting Principle | The impact of our change in accounting method for valuing certain inventories on our previously issued financial statements is presented in the following tables: Consolidated Statement of Operations (in millions) Quarter Ended September 30, 2021 Nine Months Ended September 30, 2021 As Reported 1 Effect of Change As Adjusted As Reported 1 Effect of Change As Adjusted Cost of sales $ 126.0 $ — $ 126.0 $ 378.5 $ (0.2) $ 378.3 Gross profit 83.7 — 83.7 249.2 0.2 249.4 Operating income 23.6 — 23.6 64.8 0.2 65.0 Income from continuing operations before income taxes 37.7 — 37.7 73.2 0.2 73.4 Income tax expense (13.6) — (13.6) (14.8) — (14.8) Income from continuing operations 24.1 — 24.1 58.4 0.2 58.6 Income from discontinued operations, net of tax 3.5 0.4 3.9 16.5 0.4 16.9 Net income 27.6 0.4 28.0 74.9 0.6 75.5 Net income attributable to EnPro Industries, Inc. $ 27.5 $ 0.4 $ 27.9 $ 74.8 $ 0.6 $ 75.4 Consolidated Balance Sheet (in millions) December 31, 2021 As Reported 1 Effect of Change As Adjusted Inventories $ 132.1 $ 3.8 $ 135.9 Current assets of discontinued operations 148.9 1.0 149.9 Total current assets 799.9 4.8 804.7 Total assets $ 2,969.8 $ 4.8 $ 2,974.6 Current liabilities of discontinued operations $ 35.5 $ 0.3 $ 35.8 Total current liabilities 386.0 0.3 386.3 Deferred taxes and non-current income taxes payable 165.2 0.9 166.1 Total liabilities 1,653.0 1.2 1,654.2 Retained earnings 949.5 3.6 953.1 Total shareholders' equity 1,266.7 3.6 1,270.3 Total liabilities and equity $ 2,969.8 $ 4.8 $ 2,974.6 Consolidated Statement of Cash Flows (in millions) Nine Months Ended September 30, 2021 As Reported 1 Effect of Change As Adjusted OPERATING ACTIVITIES OF CONTINUING OPERATIONS Net income $ 74.9 $ 0.6 $ 75.5 Adjustments to reconcile net income to net cash provided by operating activities of continuing operations: Income from discontinued operations, net of taxes (16.5) (0.4) (16.9) Change in assets and liabilities, net of effects of divestitures of businesses: Inventories (6.8) (0.2) (7.0) Net cash provided by operating activities of continuing operations 77.5 — 77.5 1 As Reported represents the consolidated financial statement balances that have been recast for discontinued operations exclusive of the impact of our change in accounting method from LIFO to FIFO. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations | For the quarters and nine months ended September 30, 2022 and 2021, the results of operations from Engineered Materials were as follows: (in millions) Quarters Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Net sales $ 51.8 $ 73.4 $ 166.6 $ 233.3 Cost of sales 34.9 47.0 109.1 146.0 Gross profit 16.9 26.4 57.5 87.3 Operating expenses: Selling, general and administrative 13.0 19.9 39.3 60.5 Other — 0.9 0.2 3.4 Total operating expenses 13.0 20.8 39.5 63.9 Operating income 3.9 5.6 18.0 23.4 Other expense — (0.1) — (0.1) Income from discontinued operations before income tax 3.9 5.5 18.0 23.3 Income tax expense (3.2) (1.6) (4.1) (6.4) Income from discontinued operations, net of tax $ 0.7 $ 3.9 $ 13.9 $ 16.9 The major classes of assets and liabilities for Engineered Materials are shown below: (in millions) September 30, December 31, Assets: Accounts receivable $ 36.0 $ 32.0 Inventories 27.1 28.8 Property, plant and equipment 46.0 52.4 Goodwill 5.1 5.1 Other intangible assets 16.9 19.2 Other assets 17.3 12.4 Current assets of discontinued operations $ 148.4 $ 149.9 Liabilities Accounts payable $ 10.1 $ 9.9 Accrued expenses 19.0 18.8 Other liabilities 6.7 7.1 Current liabilities of discontinued operations $ 35.8 $ 35.8 |
Acquisition (Tables)
Acquisition (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Acquisition, Pro Forma Information | The following pro forma condensed consolidated financial results of operations for EnPro are presented as if the acquisition had been completed prior to 2021: Quarter Ended September 30, Nine Months Ended September 30, (in millions) 2022 2021 2022 2021 Pro forma net sales $ 280.1 $ 256.0 $ 827.3 $ 762.1 Pro forma net income $ 28.1 $ 31.6 $ 76.2 $ 76.6 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Earnings Per Share | Quarters Ended Nine Months Ended September 30, 2022 2021 2022 2021 (in millions, except per share amounts) Numerator (basic and diluted): Net income $ 26.8 $ 24.1 $ 65.0 $ 58.6 Less: net income attributable to redeemable non-controlling interests 0.6 0.1 0.8 0.1 Income from continuing operations attributable to EnPro Industries, Inc. 26.2 24.0 64.2 58.5 Income from discontinued operations, net of tax 0.7 3.9 13.9 16.9 Net income attributable to EnPro Industries, Inc. $ 26.9 $ 27.9 $ 78.1 $ 75.4 Denominator: Weighted-average shares – basic 20.8 20.6 20.8 20.6 Share-based awards 0.1 0.1 0.1 0.2 Weighted-average shares – diluted 20.9 20.7 20.9 20.8 Basic earnings per share attributable to EnPro Industries, Inc.: Continuing operations $ 1.26 $ 1.17 $ 3.09 $ 2.84 Discontinued operations 0.03 0.19 0.67 0.82 Basic earnings per share attributable to EnPro Industries, Inc. $ 1.29 $ 1.36 $ 3.76 $ 3.66 Diluted earnings per share attributable to EnPro Industries, Inc.: Continuing operations $ 1.26 $ 1.16 $ 3.08 $ 2.82 Discontinued operations 0.03 0.19 0.66 0.81 Diluted earnings per share attributable to EnPro Industries, Inc. $ 1.29 $ 1.35 $ 3.74 $ 3.63 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | September 30, December 31, (in millions) Finished products $ 49.4 $ 45.0 Work in process 35.0 38.8 Raw materials and supplies 65.8 52.1 Total inventories $ 150.2 $ 135.9 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Net Carrying Value of Goodwill by Reportable Segment | The changes in the net carrying value of goodwill by reportable segment for the nine months ended September 30, 2022, are as follows: Sealing Advanced Surface Technologies Total (in millions) Goodwill as of December 31, 2021 $ 279.4 $ 668.6 $ 948.0 Acquisition of business — 0.4 0.4 Reclassification to held for sale (other current assets) (6.0) — (6.0) Foreign currency translation (8.8) (14.4) (23.2) Goodwill as of September 30, 2022 $ 264.6 $ 654.6 $ 919.2 |
Schedule of Finite-Lived Intangible Assets | Identifiable intangible assets are as follows: As of September 30, 2022 As of December 31, 2021 Gross Accumulated Gross Accumulated (in millions) Amortized: Customer relationships $ 476.1 $ 148.7 $ 503.4 $ 132.9 Existing technology 462.7 62.5 464.9 37.3 Trademarks 63.8 21.6 63.9 19.5 Other 36.2 25.0 36.9 17.9 1,038.8 257.8 1,069.1 207.6 Indefinite-Lived: Trademarks 30.5 — 32.7 — Total $ 1,069.3 $ 257.8 $ 1,101.8 $ 207.6 |
Schedule of Indefinite-Lived Intangible Assets | Identifiable intangible assets are as follows: As of September 30, 2022 As of December 31, 2021 Gross Accumulated Gross Accumulated (in millions) Amortized: Customer relationships $ 476.1 $ 148.7 $ 503.4 $ 132.9 Existing technology 462.7 62.5 464.9 37.3 Trademarks 63.8 21.6 63.9 19.5 Other 36.2 25.0 36.9 17.9 1,038.8 257.8 1,069.1 207.6 Indefinite-Lived: Trademarks 30.5 — 32.7 — Total $ 1,069.3 $ 257.8 $ 1,101.8 $ 207.6 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | September 30, December 31, (in millions) Salaries, wages and employee benefits $ 52.9 $ 50.5 Interest 9.9 4.9 Environmental 11.0 11.0 Income taxes 15.3 9.3 Taxes other than income taxes 7.0 7.0 Operating lease liabilities 8.7 9.5 Other 24.3 24.3 $ 129.1 $ 116.5 |
Pensions and Postretirement B_2
Pensions and Postretirement Benefits (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Net Periodic Benefit Cost | The components of net periodic benefit cost for our U.S. and foreign defined benefit pension plans for the quarters and nine months ended September 30, 2022 and 2021, are as follows: Quarters Ended September 30, Nine Months Ended September 30, Pension Benefits Other Benefits Pension Benefits Other Benefits 2022 2021 2022 2021 2022 2021 2022 2021 (in millions) Service cost $ 0.4 $ 0.4 $ — $ — $ 1.1 $ 1.2 $ — $ — Interest cost 2.5 2.3 — 7.4 6.8 — 0.1 Expected return on plan assets (3.3) (4.5) — — (9.9) (13.6) — — Amortization of prior service cost — — — — 0.1 — — Amortization of net loss 0.1 0.2 0.1 0.1 0.4 0.5 0.1 0.1 Net periodic benefit cost (benefit) $ (0.3) $ (1.6) $ 0.1 $ 0.1 $ (1.0) $ (5.0) $ 0.1 $ 0.2 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Schedule of Stockholders Equity | Changes in shareholders' equity for the nine months ended September 30, 2022 are as follows: Common Stock Additional Paid-in Capital Retained Earnings 1 Accumulated Other Comprehensive Income Treasury Stock Total Shareholders' Equity Redeemable Non-controlling Interests (in millions, except per share data) Shares Amount Balance December 31, 2021 20.7 $ 0.2 $ 303.6 $ 953.1 $ 14.6 $ (1.2) $ 1,270.3 $ 50.1 Net income — — — 16.8 — — 16.8 0.3 Other comprehensive loss — — — — (11.7) — (11.7) (1.0) Dividends ($0.28 per share) — — — (5.9) — — (5.9) — Incentive plan activity 0.1 — (4.1) — — — (4.1) — Other — — 0.1 — — — 0.1 (0.1) Balance, March 31, 2022 20.8 0.2 299.6 964.0 2.9 (1.2) 1265.5 49.3 Net income (loss) — — — 34.4 — — 34.4 (0.1) Other comprehensive loss — — — — (14.9) — (14.9) (1.1) Dividends ($0.28 per share) — — — (5.9) — (5.9) — Incentive plan activity — — 1.4 — — — 1.4 — Balance, June 30, 2022 20.8 0.2 301.0 992.5 (12.0) (1.2) 1,280.5 48.1 Net income — — — 26.9 — — 26.9 0.6 Other comprehensive loss — — — — (31.3) — (31.3) (1.8) Dividends ($0.28 per share) — — — (5.8) — — (5.8) — Incentive plan activity — — 0.6 — — — 0.6 — Other — — (0.9) (2.2) — — (3.1) 2.1 Balance, September 30, 2022 20.8 $ 0.2 $ 300.7 $ 1,011.4 $ (43.3) $ (1.2) $ 1,267.8 $ 49.0 Changes in shareholders' equity for the nine months ended September 30, 2021 are as follows: Common Stock Additional Paid-in Capital Retained Earnings 1 Accumulated Other Comprehensive Loss Treasury Stock Total Shareholders' Equity Redeemable Non-controlling Interests (in millions, except per share data) Shares Amount Balance,December 31, 2020 20.5 $ 0.2 $ 289.6 $ 797.7 $ (4.9) $ (1.2) $ 1,081.4 $ 48.4 Net income — — — 18.0 — — 18.0 0.1 Other comprehensive loss — — — — (7.9) — (7.9) (0.5) Dividends ($0.27 per share) — — — (5.7) — — (5.7) — Incentive plan activity 0.1 — 1.2 — — — 1.2 — Other — — (0.1) (3.1) — — (3.2) 3.2 Balance, March 31, 2021 20.6 0.2 290.7 806.9 (12.8) (1.2) 1,083.8 51.2 Net income (loss) — — — 29.5 — — 29.5 (0.1) Other comprehensive income — — — — 11.8 — 11.8 0.6 Dividends ($0.27 per share) — — — (5.6) — (5.6) — Incentive plan activity — — 1.6 — — — 1.6 — Other — — (0.1) 0.2 — — 0.1 (0.1) Balance, June 30, 2021 20.6 0.2 292.2 831.0 (1.0) (1.2) 1,121.2 51.6 Net income — — — 27.9 — — 27.9 0.1 Other comprehensive income (loss) — — — — (1.2) — (1.2) 0.2 Dividends ($0.27 per share) — — — (5.6) — — (5.6) — Other (1.0) 2.9 1.9 (1.9) Balance, September 30, 2021 20.6 $ 0.2 $ 291.2 $ 856.2 $ (2.2) $ (1.2) $ 1,144.2 $ 50.0 1 Retained earnings balances and net income for the quarter ended June 30, 2022, and all prior quarterly periods have been recast to reflect the impact of the change in accounting method from LIFO to FIFO for certain inventories, net of the related tax effect. (See Note 1, "Overview and Basis of Presentation" for additional details). |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The option awards issued in 2022 had a fair value of $39.07 per share at their grant date. The following assumptions were used to estimate the fair value of the 2022 option awards: Average expected term 6 years Expected volatility 39.88 % Risk-free interest rate 1.89 % Expected dividend yield 1.05 % |
Business Segment Information (T
Business Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Operating Results and Other Financial Data | Segment operating results and other financial data for the nine months ended September 30, 2022 and 2021 were as follows: Quarters Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (in millions) Sales Sealing Technologies $ 157.9 $ 146.9 $ 467.4 $ 455.9 Advanced Surface Technologies 122.5 64.3 360.7 178.2 280.4 211.2 828.1 634.1 Intersegment sales (0.3) (1.5) (0.8) (6.4) Total sales $ 280.1 $ 209.7 $ 827.3 $ 627.7 Adjusted Segment EBITDA Sealing Technologies $ 39.7 $ 34.5 $ 118.1 $ 111.0 Advanced Surface Technologies 39.9 19.4 112.6 52.3 $ 79.6 $ 53.9 $ 230.7 $ 163.3 Reconciliation of Adjusted Segment EBITDA to income before income taxes Adjusted Segment EBITDA $ 79.6 $ 53.9 $ 230.7 $ 163.3 Acquisition and divestiture expenses — (0.3) (0.4) (0.4) Non-controlling interest compensation allocation 0.6 (1.3) 0.1 (4.1) Amortization of fair value adjustment to acquisition date inventory (1.0) (1.0) (12.3) (5.8) Restructuring and impairment expense (0.1) 0.2 (1.2) (1.8) Depreciation and amortization expense (25.7) (15.4) (77.7) (46.5) Corporate expenses (9.1) (11.6) (31.4) (37.2) Interest expense, net (9.3) (2.6) (23.9) (10.2) Other income (expense), net 0.9 15.8 0.9 16.1 Income before income taxes $ 35.9 $ 37.7 $ 84.8 $ 73.4 |
Schedule of Total Assets Segment | Segment assets are as follows: September 30, 2022 December 31, 2021 (in millions) Sealing Technologies $ 694.9 $ 703.9 Advanced Surface Technologies 1,591.5 1,686.5 Corporate 259.8 434.3 Discontinued operations 148.4 149.9 $ 2,694.6 $ 2,974.6 |
Schedule of Disaggregation of Revenue | Below is a summary of our third-party sales by major end market with which we did business for the quarters and nine months ended September 30, 2022 and 2021: Quarter Ended September 30, 2022 (in millions) Sealing Technologies Advanced Surface Technologies Total Aerospace $ 10.9 $ 1.5 $ 12.4 Automotive 0.6 0.5 1.1 Chemical and material processing 19.1 — 19.1 Food and pharmaceutical 17.6 — 17.6 General industrial 40.0 6.8 46.8 Medium-duty/heavy-duty truck 51.7 — 51.7 Oil and gas 5.5 1.6 7.1 Power generation 8.7 — 8.7 Semiconductors 1.9 111.5 113.4 Other 1.6 0.6 2.2 Total third-party sales $ 157.6 $ 122.5 $ 280.1 Quarter Ended September 30, 2021 (in millions) Sealing Technologies Advanced Surface Technologies Total Aerospace $ 8.4 $ 2.6 $ 11.0 Automotive 0.6 0.2 0.8 Chemical and material processing 17.5 — 17.5 Food and pharmaceutical 16.8 — 16.8 General industrial 40.9 7.2 48.1 Medium-duty/heavy-duty truck 43.2 — 43.2 Oil and gas 4.6 1.0 5.6 Power generation 8.4 0.1 8.5 Semiconductors 3.3 52.5 55.8 Other 1.8 0.6 2.4 Total third-party sales $ 145.5 $ 64.2 $ 209.7 Nine Months Ended September 30, 2022 (in millions) Sealing Technologies Advanced Surface Technologies Total Aerospace $ 29.7 $ 4.6 $ 34.3 Automotive 1.7 1.3 3.0 Chemical and material processing 59.1 — 59.1 Food and pharmaceutical 55.1 — 55.1 General industrial 123.5 21.2 144.7 Medium-duty/heavy-duty truck 139.9 — 139.9 Oil and gas 16.1 3.3 19.4 Power generation 31.6 0.1 31.7 Semiconductors 4.4 327.8 332.2 Other 5.6 2.3 7.9 Total third-party sales $ 466.7 $ 360.6 $ 827.3 Nine Months Ended September 30, 2021 (in millions) Sealing Technologies Advanced Surface Technologies Total Aerospace $ 23.4 $ 7.1 $ 30.5 Automotive 1.6 0.7 2.3 Chemical and material processing 54.1 — 54.1 Food and pharmaceutical 49.8 — 49.8 General industrial 128.5 19.4 147.9 Medium-duty/heavy-duty truck 129.7 — 129.7 Oil and gas 14.2 3.4 17.6 Power generation 29.1 0.1 29.2 Semiconductors 13.4 145.3 158.7 Other 5.9 2.0 7.9 Total third-party sales $ 449.7 $ 178.0 $ 627.7 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis are summarized as follows: Fair Value Measurements as of September 30, 2022 December 31, 2021 (in millions) Assets Foreign currency derivatives 15.8 8.7 Deferred compensation assets 9.6 10.9 $ 25.4 $ 19.6 Liabilities Deferred compensation liabilities $ 9.9 $ 11.4 |
Schedule of Carrying Value of Financial Instruments | The carrying values of our significant financial instruments reflected in the Consolidated Balance Sheets approximated their respective fair values except for the following instruments: September 30, 2022 December 31, 2021 Carrying Fair Carrying Fair (in millions) Long-term debt $ 883.6 $ 870.1 $ 976.6 $ 998.3 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Income by Component | Changes in accumulated other comprehensive income (loss) by component (after tax) for the quarter ended September 30, 2022 are as follows: (in millions) Unrealized Pension and Total Beginning balance $ 19.9 $ (31.9) $ (12.0) Other comprehensive loss before reclassifications (33.3) — (33.3) Amounts reclassified from accumulated other comprehensive loss — 0.2 0.2 Net current-period other comprehensive income (loss) (33.3) 0.2 (33.1) Less: other comprehensive loss attributable to redeemable non-controlling interests (1.8) — (1.8) Net current-period other comprehensive income (loss) attributable to EnPro Industries, Inc. (31.5) 0.2 (31.3) Ending balance $ (11.6) $ (31.7) $ (43.3) Changes in accumulated other comprehensive income (loss) by component (after tax) for the quarter ended September 30, 2021 are as follows: (in millions) Unrealized Pension and Total Beginning balance $ 35.3 $ (36.3) $ (1.0) Other comprehensive loss before reclassifications (1.2) — (1.2) Amounts reclassified from accumulated other comprehensive loss — 0.2 0.2 Net current-period other comprehensive income (loss) (1.2) 0.2 (1.0) Less: other comprehensive income attributable to redeemable non-controlling interests 0.2 — 0.2 Net current-period other comprehensive income (loss) attributable to EnPro Industries, Inc. (1.4) 0.2 (1.2) Ending balance $ 33.9 $ (36.1) $ (2.2) Changes in accumulated other comprehensive income (loss) by component (after tax) for the nine months ended September 30, 2022 are as follows: (in millions) Unrealized Pension and Total Beginning balance $ 46.7 $ (32.1) $ 14.6 Other comprehensive loss before reclassifications (62.1) (62.1) Amounts reclassified from accumulated other comprehensive income — 0.4 0.4 Net current-period other comprehensive income (loss) (62.1) 0.4 (61.7) Less: other comprehensive loss attributable to redeemable non-controlling interests (3.8) — (3.8) Net current-period other comprehensive income (loss) attributable to EnPro Industries, Inc. (58.3) 0.4 (57.9) Ending balance $ (11.6) $ (31.7) $ (43.3) Changes in accumulated other comprehensive income (loss) by component (after tax) for the nine months ended September 30, 2021 are as follows: (in millions) Unrealized Pension and Total Beginning balance $ 31.7 $ (36.6) $ (4.9) Other comprehensive income before reclassifications 2.5 — 2.5 Amounts reclassified from accumulated other comprehensive loss — 0.5 0.5 Net current-period other comprehensive income 2.5 0.5 3.0 Less: other comprehensive income attributable to redeemable non-controlling interests 0.3 — 0.3 Net current-period other comprehensive income attributable to EnPro Industries, Inc. 2.2 0.5 2.7 Ending balance $ 33.9 $ (36.1) $ (2.2) |
Schedule of Reclassifications Out of Accumulated Other Comprehensive Income (loss) | Reclassifications out of accumulated other comprehensive income (loss) for the nine months ended September 30, 2022 and 2021 are as follows: Details about Accumulated Other Comprehensive Income (Loss) Components Amount Reclassified from Accumulated Other Affected Statement of Quarters Ended Nine Months Ended (in millions) 2022 2021 2022 2021 Pension and other postretirement plans adjustments: Actuarial losses $ 0.2 $ 0.3 $ 0.5 $ 0.6 (1) Prior service costs — — — 0.1 (1) Total before tax 0.2 0.3 0.5 0.7 Income before income taxes Tax benefit — (0.1) (0.1) (0.2) Income tax expense Net of tax $ 0.2 $ 0.2 $ 0.4 $ 0.5 Net income (1) These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension cost. As these are components of net periodic pension cost other than service cost, the affected Statement of Operations captions are other income (expense) (See Note 10, “Pensions and Postretirement Benefits" ” for additional details). |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Product Warranty Liability | Changes in the product warranty liability for the nine months ended September 30, 2022 and 2021 are as follows: 2022 2021 (in millions) Balance at beginning of year $ 4.9 $ 6.5 Net charges to expense 0.9 1.4 Settlements made (0.8) (2.0) Balance at end of period $ 5.0 $ 5.9 |
Overview and Basis of Present_4
Overview and Basis of Presentation - Narratives (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Dec. 31, 2021 | Jan. 01, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle | |||||||
Goodwill | $ 919.2 | $ 919.2 | $ 948 | ||||
Inventories | 150.2 | 150.2 | 135.9 | ||||
Retained earnings | 1,011.4 | 1,011.4 | 953.1 | ||||
Current assets of discontinued operations | 148.4 | 148.4 | $ 149.9 | ||||
Cost of sales | 169.3 | $ 126 | 509.5 | $ 378.3 | |||
Income from discontinued operations, net of tax | 0.7 | $ 3.9 | 13.9 | $ 16.9 | |||
Alluxa Inc | |||||||
New Accounting Pronouncements or Change in Accounting Principle | |||||||
Goodwill | $ 126 | ||||||
Percentage above carrying value (percent) | 21% | ||||||
Reporting unit effect of one percent increase in cost of capital on goodwill (percent) | 12% | ||||||
Adjustment | |||||||
New Accounting Pronouncements or Change in Accounting Principle | |||||||
Inventories | $ 3.2 | ||||||
Retained earnings | 2.9 | ||||||
Current assets of discontinued operations | $ 0.6 | ||||||
Adjustment | Pro Forma | |||||||
New Accounting Pronouncements or Change in Accounting Principle | |||||||
Inventories | (6.9) | (6.9) | |||||
Current assets of discontinued operations | $ (1.2) | (1.2) | |||||
Cost of sales | 3.1 | ||||||
Income from discontinued operations, net of tax | $ (0.1) |
Overview and Basis of Present_5
Overview and Basis of Presentation - Consolidate Statement of Operation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Cost of sales | $ 169.3 | $ 126 | $ 509.5 | $ 378.3 |
Gross profit | 110.8 | 83.7 | 317.8 | 249.4 |
Operating income | 44.9 | 23.6 | 110.4 | 65 |
Income from continuing operations before income taxes | 35.9 | 37.7 | 84.8 | 73.4 |
Tax benefit | (9.1) | (13.6) | (19.8) | (14.8) |
Income from continuing operations | 26.8 | 24.1 | 65 | 58.6 |
Income from discontinued operations, net of tax | 0.7 | 3.9 | 13.9 | 16.9 |
Net income | 27.5 | 28 | 78.9 | 75.5 |
Net income attributable to EnPro Industries, Inc. | $ 26.9 | 27.9 | $ 78.1 | 75.4 |
As Reported | ||||
Cost of sales | 126 | 378.5 | ||
Gross profit | 83.7 | 249.2 | ||
Operating income | 23.6 | 64.8 | ||
Income from continuing operations before income taxes | 37.7 | 73.2 | ||
Tax benefit | (13.6) | (14.8) | ||
Income from continuing operations | 24.1 | 58.4 | ||
Income from discontinued operations, net of tax | 3.5 | 16.5 | ||
Net income | 27.6 | 74.9 | ||
Net income attributable to EnPro Industries, Inc. | 27.5 | 74.8 | ||
Effect of Change | ||||
Cost of sales | 0 | (0.2) | ||
Gross profit | 0 | 0.2 | ||
Operating income | 0 | 0.2 | ||
Income from continuing operations before income taxes | 0 | 0.2 | ||
Tax benefit | 0 | 0 | ||
Income from continuing operations | 0 | 0.2 | ||
Income from discontinued operations, net of tax | 0.4 | 0.4 | ||
Net income | 0.4 | 0.6 | ||
Net income attributable to EnPro Industries, Inc. | $ 0.4 | $ 0.6 |
Overview and Basis of Present_6
Overview and Basis of Presentation - Consolidate Statement of Balance sheet (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Inventories | $ 150.2 | $ 135.9 |
Current assets of discontinued operations | 148.4 | 149.9 |
Total current assets | 650.6 | 804.7 |
Total assets | 2,694.6 | 2,974.6 |
Current liabilities of discontinued operations | 35.8 | 35.8 |
Total current liabilities | 253.3 | 386.3 |
Deferred taxes and non-current income taxes payable | 148.8 | 166.1 |
Total liabilities | 1,377.8 | 1,654.2 |
Retained earnings | 1,011.4 | 953.1 |
Total shareholders’ equity | 1,267.8 | 1,270.3 |
Total liabilities and equity | $ 2,694.6 | 2,974.6 |
As Reported | ||
Inventories | 132.1 | |
Current assets of discontinued operations | 148.9 | |
Total current assets | 799.9 | |
Total assets | 2,969.8 | |
Current liabilities of discontinued operations | 35.5 | |
Total current liabilities | 386 | |
Deferred taxes and non-current income taxes payable | 165.2 | |
Total liabilities | 1,653 | |
Retained earnings | 949.5 | |
Total shareholders’ equity | 1,266.7 | |
Total liabilities and equity | 2,969.8 | |
Effect of Change | ||
Inventories | 3.8 | |
Current assets of discontinued operations | 1 | |
Total current assets | 4.8 | |
Total assets | 4.8 | |
Current liabilities of discontinued operations | 0.3 | |
Total current liabilities | 0.3 | |
Deferred taxes and non-current income taxes payable | 0.9 | |
Total liabilities | 1.2 | |
Retained earnings | 3.6 | |
Total shareholders’ equity | 3.6 | |
Total liabilities and equity | $ 4.8 |
Overview and Basis of Present_7
Overview and Basis of Presentation - Consolidate Statement of Cashflow Statement (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net income | $ 27.5 | $ 28 | $ 78.9 | $ 75.5 |
Income from discontinued operations, net of tax | $ (0.7) | (3.9) | (13.9) | (16.9) |
Inventories | (19.2) | (7) | ||
Net cash provided by operating activities of continuing operations | $ 111.6 | 77.5 | ||
As Reported | ||||
Net income | 27.6 | 74.9 | ||
Income from discontinued operations, net of tax | (3.5) | (16.5) | ||
Inventories | (6.8) | |||
Net cash provided by operating activities of continuing operations | 77.5 | |||
Effect of Change | ||||
Net income | 0.4 | 0.6 | ||
Income from discontinued operations, net of tax | $ (0.4) | (0.4) | ||
Inventories | (0.2) | |||
Net cash provided by operating activities of continuing operations | $ 0 |
Discontinued Operations- Result
Discontinued Operations- Results of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Operating expenses: | ||||
Income from discontinued operations, net of tax | $ 13.9 | $ 16.9 | ||
Held-for-sale | Engineered Materials Segment | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | ||||
Net sales | $ 51.8 | $ 73.4 | 166.6 | 233.3 |
Cost of sales | 34.9 | 47 | 109.1 | 146 |
Gross profit | 16.9 | 26.4 | 57.5 | 87.3 |
Operating expenses: | ||||
Selling, general and administrative | 13 | 19.9 | 39.3 | 60.5 |
Other | 0 | 0.9 | 0.2 | 3.4 |
Total operating expenses | 13 | 20.8 | 39.5 | 63.9 |
Operating income | 3.9 | 5.6 | 18 | 23.4 |
Other expense | 0 | (0.1) | 0 | (0.1) |
Income from discontinued operations before income tax | 3.9 | 5.5 | 18 | 23.3 |
Income tax expense | (3.2) | (1.6) | (4.1) | (6.4) |
Income from discontinued operations, net of tax | $ 0.7 | $ 3.9 | $ 13.9 | $ 16.9 |
Discontinued Operations - Class
Discontinued Operations - Classes of Assets and Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Assets: | ||
Current assets of discontinued operations | $ 148.4 | $ 149.9 |
Liabilities | ||
Current liabilities of discontinued operations | 35.8 | 35.8 |
Engineered Materials Segment | Held-for-sale | ||
Assets: | ||
Accounts receivable | 36 | 32 |
Inventories | 27.1 | 28.8 |
Property, plant and equipment | 46 | 52.4 |
Goodwill | 5.1 | 5.1 |
Other intangible assets | 16.9 | 19.2 |
Other assets | 17.3 | 12.4 |
Current assets of discontinued operations | 148.4 | 149.9 |
Liabilities | ||
Accounts payable | 10.1 | 9.9 |
Accrued expenses | 19 | 18.8 |
Other liabilities | 6.7 | 7.1 |
Current liabilities of discontinued operations | $ 35.8 | $ 35.8 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Dec. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Nov. 04, 2022 | Dec. 31, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||
Current assets of discontinued operations | $ 148.4 | $ 148.4 | $ 149.9 | ||||
Current liabilities of discontinued operations | 35.8 | 35.8 | 35.8 | ||||
Discontinued Operations, Disposed of by Sale | Engineered Materials Segment | Scenario, Adjustment | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||
Income tax expense | (1.1) | $ 0.1 | (1.6) | $ 1.5 | |||
Held-for-sale | Engineered Materials Segment | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||
Income tax expense | 3.2 | $ 1.6 | 4.1 | $ 6.4 | |||
Current assets of discontinued operations | 148.4 | 148.4 | 149.9 | ||||
Current liabilities of discontinued operations | 35.8 | 35.8 | 35.8 | ||||
Goodwill | 5.1 | 5.1 | 5.1 | ||||
Accrued expenses | 19 | 19 | $ 18.8 | ||||
Held-for-sale | GGB | Sealing Technologies | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||
Current assets of discontinued operations | 7.9 | 7.9 | |||||
Goodwill | 6 | 6 | |||||
Accrued expenses | 0.3 | 0.3 | |||||
Held-for-sale | GPT | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||
Current assets of discontinued operations | 16.3 | 16.3 | |||||
Current liabilities of discontinued operations | $ 4.2 | $ 4.2 | |||||
Subsequent Event | Discontinued Operations, Disposed of by Sale | GGB | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||
Proceeds from sale of investment projects | $ 305 | ||||||
Subsequent Event | Discontinued Operations, Disposed of by Sale | GGB | Forecast | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||
Gain (loss) on sales of business | $ 190 |
Acquisition - Proforma Results
Acquisition - Proforma Results (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Business Acquisition, Pro Forma Information | ||||
Pro forma net sales | $ 280.1 | $ 256 | $ 827.3 | $ 762.1 |
Pro forma net income | $ 28.1 | $ 31.6 | $ 76.2 | $ 76.6 |
Acquisition - Additional Inform
Acquisition - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
NxEdge | ||
Business Acquisition | ||
Acquisition of business | $ 0.4 | |
Backlog | ||
Business Acquisition | ||
Acquisition cost | $ 1.8 | $ 14.9 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate (as a percent) | 25.40% | 36.20% | 23.40% | 20.20% |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator (basic and diluted): | ||||
Net income | $ 26.8 | $ 24.1 | $ 65 | $ 58.6 |
Less: net income attributable to redeemable non-controlling interests | 0.6 | 0.1 | 0.8 | 0.1 |
Income from continuing operations attributable to EnPro Industries, Inc. | 26.2 | 24 | 64.2 | 58.5 |
Income from discontinued operations, net of tax | 0.7 | 3.9 | 13.9 | 16.9 |
Net income attributable to EnPro Industries, Inc. | 26.9 | 27.9 | 78.1 | 75.4 |
Net income attributable to EnPro Industries, Inc. | $ 26.9 | $ 27.9 | $ 78.1 | $ 75.4 |
Denominator: | ||||
Weighted-average shares – basic (in shares) | 20.8 | 20.6 | 20.8 | 20.6 |
Share-based awards (in shares) | 0.1 | 0.1 | 0.1 | 0.2 |
Weighted-average shares – diluted (in shares) | 20.9 | 20.7 | 20.9 | 20.8 |
Basic earnings per share attributable to EnPro Industries, Inc.: | ||||
Continuing operations (in dollars per share) | $ 1.26 | $ 1.17 | $ 3.09 | $ 2.84 |
Discontinued operations (in dollars per share) | 0.03 | 0.19 | 0.67 | 0.82 |
Basic earnings per share attributable to EnPro Industries, Inc. (in dollars per share) | 1.29 | 1.36 | 3.76 | 3.66 |
Diluted earnings per share attributable to EnPro Industries, Inc.: | ||||
Continuing operations (in dollars per share) | 1.26 | 1.16 | 3.08 | 2.82 |
Discontinued operations (in dollars per share) | 0.03 | 0.19 | 0.66 | 0.81 |
Diluted earnings per share attributable to EnPro Industries, Inc. (in dollars per share) | $ 1.29 | $ 1.35 | $ 3.74 | $ 3.63 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Finished products | $ 49.4 | $ 45 |
Work in process | 35 | 38.8 |
Raw materials and supplies | 65.8 | 52.1 |
Inventories | $ 150.2 | $ 135.9 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Schedule of Changes in Net Carrying Value of Goodwill by Reportable Segment (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill | |
Goodwill, beginning balance | $ 948 |
Acquisition of business | 0.4 |
Reclassification to held for sale (other current assets) | (6) |
Foreign currency translation | (23.2) |
Goodwill, ending balance | 919.2 |
Sealing Technologies | |
Goodwill | |
Goodwill, beginning balance | 279.4 |
Acquisition of business | 0 |
Reclassification to held for sale (other current assets) | (6) |
Foreign currency translation | (8.8) |
Goodwill, ending balance | 264.6 |
Advanced Surface Technologies | |
Goodwill | |
Goodwill, beginning balance | 668.6 |
Acquisition of business | 0.4 |
Reclassification to held for sale (other current assets) | 0 |
Foreign currency translation | (14.4) |
Goodwill, ending balance | $ 654.6 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Segment Reporting Information | |||||
Amortization expense | $ 19.2 | $ 57.9 | $ 10.7 | $ 32.2 | |
Sealing Technologies | |||||
Segment Reporting Information | |||||
Accumulated impairment losses | $ 27.8 | $ 27.8 | $ 27.8 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Schedule of Identifiable Intangible Assets (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | $ 1,038.8 | $ 1,069.1 |
Accumulated Amortization | 257.8 | 207.6 |
Total | 1,069.3 | 1,101.8 |
Trademarks | ||
Indefinite-lived Intangible Assets | ||
Indefinite-Lived: | 30.5 | 32.7 |
Customer relationships | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 476.1 | 503.4 |
Accumulated Amortization | 148.7 | 132.9 |
Existing technology | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 462.7 | 464.9 |
Accumulated Amortization | 62.5 | 37.3 |
Trademarks | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 63.8 | 63.9 |
Accumulated Amortization | 21.6 | 19.5 |
Other | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 36.2 | 36.9 |
Accumulated Amortization | $ 25 | $ 17.9 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Salaries, wages and employee benefits | $ 52.9 | $ 50.5 |
Interest | 9.9 | 4.9 |
Environmental | 11 | 11 |
Income taxes | 15.3 | 9.3 |
Taxes other than income taxes | 7 | 7 |
Operating lease liabilities | 8.7 | 9.5 |
Other | 24.3 | 24.3 |
Accrued expenses | $ 129.1 | $ 116.5 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) | 9 Months Ended | ||||
Dec. 17, 2021 | Oct. 17, 2018 | Sep. 30, 2022 | Dec. 31, 2021 | Oct. 31, 2018 | |
Line of Credit Facility | |||||
Long-term debt | $ 883,600,000 | $ 976,600,000 | |||
Short-term debt | $ 0 | $ 149,300,000 | |||
364-Day Facility | Line of Credit | |||||
Line of Credit Facility | |||||
Line of credit facility, maximum borrowing capacity | $ 150,000,000 | ||||
364-Day Facility | Line of Credit | LIBOR | |||||
Line of Credit Facility | |||||
Variable rate on debt (as a percent) | 1.50% | ||||
364-Day Facility | Line of Credit | Base Rate | |||||
Line of Credit Facility | |||||
Variable rate on debt (as a percent) | 0.50% | ||||
Line of Credit | |||||
Line of Credit Facility | |||||
Senior notes | 1,007,500,000 | ||||
Maximum borrowing capacity expansion threshold | $ 275,000,000 | ||||
Maximum borrowing capacity expansion threshold, percent (as a percent) | 100% | ||||
Line of Credit | Revolving Credit Facility | |||||
Line of Credit Facility | |||||
Credit facility maximum availability (in years) | 5 years | ||||
Line of credit facility, maximum borrowing capacity | $ 400,000,000 | ||||
Line of credit facility, unused capacity, commitment fee (as a percent) | 0.225% | ||||
Credit facility borrowing capacity | $ 299,200,000 | ||||
Letter of credit outstanding | 10,800,000 | ||||
Long-term debt | $ 90,000,000 | ||||
Line of Credit | Revolving Credit Facility | LIBOR | |||||
Line of Credit Facility | |||||
Variable rate on debt (as a percent) | 1.75% | ||||
Line of Credit | Revolving Credit Facility | Base Rate | |||||
Line of Credit Facility | |||||
Variable rate on debt (as a percent) | 0.75% | ||||
Line of Credit | Term Loan | LIBOR | |||||
Line of Credit Facility | |||||
Variable rate on debt (as a percent) | 1.75% | ||||
Line of Credit | Term Loan | Base Rate | |||||
Line of Credit Facility | |||||
Variable rate on debt (as a percent) | 0.75% | ||||
Line of Credit | Term Loan A-1 | |||||
Line of Credit Facility | |||||
Senior notes | $ 150,000,000 | ||||
Line of credit facility, maximum borrowing capacity | $ 142,500,000 | ||||
Debt instrument, periodic payment, years one to three, percentage of principal (as a percent) | 2.50% | ||||
Debt instrument, periodic payment, years two, percentage of principal (as a percent) | 5% | ||||
Debt instrument, periodic payment, years three, percentage of principal (as a percent) | 1.25% | ||||
Long-term debt | $ 138,800,000 | ||||
Line of Credit | Term Loan A-2 | |||||
Line of Credit Facility | |||||
Credit facility maximum availability (in years) | 5 years | ||||
Line of credit facility, maximum borrowing capacity | $ 315,000,000 | ||||
Debt instrument, periodic payment, years one to three, percentage of principal (as a percent) | 2.50% | ||||
Debt instrument, periodic payment, years two, percentage of principal (as a percent) | 5% | ||||
Debt instrument, periodic payment, years three, percentage of principal (as a percent) | 1.25% | ||||
Long-term debt | $ 309,100,000 | ||||
Senior Notes | |||||
Line of Credit Facility | |||||
Senior notes | $ 350,000,000 | ||||
Interest rate (as a percent) | 5.75% | 5.875% | |||
Aggregate principal amount redeemed | $ 450,000,000 | ||||
Senior Notes | Before October 15, 2021 | |||||
Line of Credit Facility | |||||
Redemption price (as a percent) | 100% |
Pensions and Postretirement B_3
Pensions and Postretirement Benefits - Schedule of Net Periodic Benefit Cost (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Pension Benefits | ||||
Defined Benefit Plan Disclosure | ||||
Service cost | $ 400,000 | $ 400,000 | $ 1,100,000 | $ 1,200,000 |
Interest cost | 2,500,000 | 2,300,000 | 7,400,000 | 6,800,000 |
Expected return on plan assets | (3,300,000) | (4,500,000) | (9,900,000) | (13,600,000) |
Amortization of prior service cost | 0 | 0 | 100,000 | |
Amortization of net loss | 100,000 | 200,000 | 400,000 | 500,000 |
Net periodic benefit cost (benefit) | (300,000) | (1,600,000) | (1,000,000) | (5,000,000) |
Other Benefits | ||||
Defined Benefit Plan Disclosure | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | 0 | 0 | 100,000 | |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of prior service cost | 0 | 0 | 0 | 0 |
Amortization of net loss | 100,000 | 100,000 | 100,000 | 100,000 |
Net periodic benefit cost (benefit) | $ 100,000 | $ 100,000 | 100,000 | $ 200,000 |
U.S. | ||||
Defined Benefit Plan Disclosure | ||||
Contributions by employer | $ 0 |
Shareholders' Equity - Changes
Shareholders' Equity - Changes in Shareholders' Equity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | $ 27.5 | $ 28 | $ 78.9 | $ 75.5 | ||||
Other comprehensive income (loss) | $ (33.1) | $ (1) | (61.7) | 3 | ||||
Cash dividends per share, declared (in dollars per share) | $ 0.28 | $ 0.28 | $ 0.28 | $ 0.27 | $ 0.27 | $ 0.27 | ||
Total Shareholders' Equity | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Beginning balance | $ 1,280.5 | $ 1,265.5 | $ 1,270.3 | $ 1,121.2 | $ 1,083.8 | $ 1,081.4 | 1,270.3 | 1,081.4 |
Net income (loss) | 26.9 | 34.4 | 16.8 | 27.9 | 29.5 | 18 | ||
Other comprehensive income (loss) | (31.3) | (14.9) | (11.7) | (1.2) | 11.8 | (7.9) | ||
Dividends | (5.8) | (5.9) | (5.9) | (5.6) | (5.6) | (5.7) | ||
Incentive plan activity | 0.6 | 1.4 | (4.1) | 1.6 | 1.2 | |||
Other | (3.1) | 0.1 | 1.9 | 0.1 | (3.2) | |||
Ending balance | 1,267.8 | 1,280.5 | 1,265.5 | 1,144.2 | 1,121.2 | 1,083.8 | 1,267.8 | 1,144.2 |
Common Stock | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Beginning balance | $ 0.2 | $ 0.2 | $ 0.2 | $ 0.2 | $ 0.2 | $ 0.2 | $ 0.2 | $ 0.2 |
Balance (in shares) | 20.8 | 20.8 | 20.7 | 20.6 | 20.6 | 20.5 | 20.7 | 20.5 |
Incentive plan activity (in shares) | 0.1 | 0.1 | ||||||
Ending balance | $ 0.2 | $ 0.2 | $ 0.2 | $ 0.2 | $ 0.2 | $ 0.2 | $ 0.2 | $ 0.2 |
Balance (in shares) | 20.8 | 20.8 | 20.8 | 20.6 | 20.6 | 20.6 | 20.8 | 20.6 |
Additional Paid-in Capital | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Beginning balance | $ 301 | $ 299.6 | $ 303.6 | $ 292.2 | $ 290.7 | $ 289.6 | $ 303.6 | $ 289.6 |
Incentive plan activity | 0.6 | 1.4 | (4.1) | 1.6 | 1.2 | |||
Other | (0.9) | 0.1 | (1) | (0.1) | (0.1) | |||
Ending balance | 300.7 | 301 | 299.6 | 291.2 | 292.2 | 290.7 | 300.7 | 291.2 |
Retained Earnings | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Beginning balance | 992.5 | 964 | 953.1 | 831 | 806.9 | 797.7 | 953.1 | 797.7 |
Net income (loss) | 26.9 | 34.4 | 16.8 | 27.9 | 29.5 | 18 | ||
Dividends | (5.8) | (5.9) | (5.9) | (5.6) | (5.6) | (5.7) | ||
Other | (2.2) | 2.9 | 0.2 | (3.1) | ||||
Ending balance | 1,011.4 | 992.5 | 964 | 856.2 | 831 | 806.9 | 1,011.4 | 856.2 |
Accumulated Other Comprehensive Income (Loss) | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Beginning balance | (12) | 2.9 | 14.6 | (1) | (12.8) | (4.9) | 14.6 | (4.9) |
Other comprehensive income (loss) | (31.3) | (14.9) | (11.7) | (1.2) | 11.8 | (7.9) | ||
Ending balance | (43.3) | (12) | 2.9 | (2.2) | (1) | (12.8) | (43.3) | (2.2) |
Treasury Stock | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Beginning balance | (1.2) | (1.2) | (1.2) | (1.2) | (1.2) | (1.2) | (1.2) | (1.2) |
Ending balance | (1.2) | (1.2) | (1.2) | (1.2) | (1.2) | (1.2) | (1.2) | (1.2) |
Redeemable Non-controlling Interests | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Beginning balance | 48.1 | 49.3 | 50.1 | 51.6 | 51.2 | 48.4 | 50.1 | 48.4 |
Net income (loss) | 0.6 | (0.1) | 0.3 | 0.1 | (0.1) | 0.1 | ||
Other comprehensive income (loss) | (1.8) | (1.1) | (1) | 0.2 | 0.6 | (0.5) | ||
Other | 2.1 | (0.1) | (1.9) | (0.1) | 3.2 | |||
Ending balance | $ 49 | $ 48.1 | $ 49.3 | $ 50 | $ 51.6 | $ 51.2 | $ 49 | $ 50 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
Oct. 31, 2022 | Feb. 28, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Subsequent Event | ||||||||||
Dividends paid | $ 17,600,000 | $ 16,800,000 | ||||||||
Cash dividends per share, declared (in dollars per share) | $ 0.28 | $ 0.28 | $ 0.28 | $ 0.27 | $ 0.27 | $ 0.27 | ||||
Subsequent Event | ||||||||||
Subsequent Event | ||||||||||
Cash dividends per share, declared (in dollars per share) | $ 0.28 | |||||||||
Stock repurchase program, authorized amount (up to) | $ 50,000,000 | |||||||||
Employee Stock Options | ||||||||||
Subsequent Event | ||||||||||
Average expected term (in years) | 6 years | |||||||||
Fair value (in dollars per share) | $ 39.07 | |||||||||
Key Executives | ||||||||||
Subsequent Event | ||||||||||
Options issued (in shares) | 0.1 | |||||||||
Exercise price (in dollars per share) | $ 106.54 | |||||||||
Option term (in years) | 10 years |
Shareholders' Equity - Schedule
Shareholders' Equity - Schedule of Assumptions Used (Details) - Employee Stock Options | 9 Months Ended |
Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Average expected term | 6 years |
Expected volatility | 39.88% |
Risk-free interest rate | 1.89% |
Expected dividend yield | 1.05% |
Business Segment Information -
Business Segment Information - Additional Information (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | segment | 2 |
Performance obligation | $ | $ 335 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | |
Segment Reporting Information | |
Remaining performance obligation, percentage (as a percent) | 93% |
Remaining performance obligation, expected timing (in years) | 1 year |
Business Segment Information _2
Business Segment Information - Schedule of Segment Operating Results and Other Financial Data (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information | ||||
Net sales | $ 280.1 | $ 209.7 | $ 827.3 | $ 627.7 |
Adjusted Segment EBITDA | 79.6 | 53.9 | 230.7 | 163.3 |
Acquisition and divestiture expenses | 0 | (0.3) | (0.4) | (0.4) |
Non-controlling interest compensation allocation | 0.6 | (1.3) | 0.1 | (4.1) |
Amortization of fair value adjustment to acquisition date inventory | (1) | (1) | (12.3) | (5.8) |
Restructuring and impairment expense | (0.1) | 0.2 | (1.2) | (1.8) |
Depreciation and amortization expense | (25.7) | (15.4) | (77.7) | (46.5) |
Interest expense, net | (9.3) | (2.6) | (23.9) | (10.2) |
Other income (expense), net | 0.3 | 16.7 | (1.7) | 18.6 |
Income from continuing operations before income taxes | 35.9 | 37.7 | 84.8 | 73.4 |
Effect of Change | ||||
Segment Reporting Information | ||||
Income from continuing operations before income taxes | 0 | 0.2 | ||
Operating Segments | ||||
Segment Reporting Information | ||||
Net sales | 280.4 | 211.2 | 828.1 | 634.1 |
Intersegment sales | ||||
Segment Reporting Information | ||||
Net sales | (0.3) | (1.5) | (0.8) | (6.4) |
Corporate | ||||
Segment Reporting Information | ||||
Corporate expenses | (9.1) | (11.6) | (31.4) | (37.2) |
Segment Reconciling Items | ||||
Segment Reporting Information | ||||
Other income (expense), net | 0.9 | 15.8 | 0.9 | 16.1 |
Sealing Technologies | ||||
Segment Reporting Information | ||||
Net sales | 157.6 | 145.5 | 466.7 | 449.7 |
Sealing Technologies | Operating Segments | ||||
Segment Reporting Information | ||||
Net sales | 157.9 | 146.9 | 467.4 | 455.9 |
Adjusted Segment EBITDA | 39.7 | 34.5 | 118.1 | 111 |
Sealing Technologies | Operating Segments | Effect of Change | ||||
Segment Reporting Information | ||||
Adjusted Segment EBITDA | 0.2 | |||
Advanced Surface Technologies | ||||
Segment Reporting Information | ||||
Net sales | 122.5 | 64.2 | 360.6 | 178 |
Advanced Surface Technologies | Operating Segments | ||||
Segment Reporting Information | ||||
Net sales | 122.5 | 64.3 | 360.7 | 178.2 |
Adjusted Segment EBITDA | $ 39.9 | $ 19.4 | $ 112.6 | $ 52.3 |
Business Segment Information _3
Business Segment Information - Schedule of Assets and Long Lived Assets Segment (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Segment Reporting Information | ||
Assets | $ 2,694.6 | $ 2,974.6 |
Operating Segments | Sealing Technologies | ||
Segment Reporting Information | ||
Assets | 694.9 | 703.9 |
Operating Segments | Advanced Surface Technologies | ||
Segment Reporting Information | ||
Assets | 1,591.5 | 1,686.5 |
Corporate | ||
Segment Reporting Information | ||
Assets | 259.8 | 434.3 |
Discontinued operations | ||
Segment Reporting Information | ||
Assets | $ 148.4 | $ 149.9 |
Business Segment Information _4
Business Segment Information - Revenue by End Market (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue | ||||
Net sales | $ 280.1 | $ 209.7 | $ 827.3 | $ 627.7 |
Sealing Technologies | ||||
Disaggregation of Revenue | ||||
Net sales | 157.6 | 145.5 | 466.7 | 449.7 |
Advanced Surface Technologies | ||||
Disaggregation of Revenue | ||||
Net sales | 122.5 | 64.2 | 360.6 | 178 |
Aerospace | ||||
Disaggregation of Revenue | ||||
Net sales | 12.4 | 11 | 34.3 | 30.5 |
Aerospace | Sealing Technologies | ||||
Disaggregation of Revenue | ||||
Net sales | 10.9 | 8.4 | 29.7 | 23.4 |
Aerospace | Advanced Surface Technologies | ||||
Disaggregation of Revenue | ||||
Net sales | 1.5 | 2.6 | 4.6 | 7.1 |
Automotive | ||||
Disaggregation of Revenue | ||||
Net sales | 1.1 | 0.8 | 3 | 2.3 |
Automotive | Sealing Technologies | ||||
Disaggregation of Revenue | ||||
Net sales | 0.6 | 0.6 | 1.7 | 1.6 |
Automotive | Advanced Surface Technologies | ||||
Disaggregation of Revenue | ||||
Net sales | 0.5 | 0.2 | 1.3 | 0.7 |
Chemical and material processing | ||||
Disaggregation of Revenue | ||||
Net sales | 19.1 | 17.5 | 59.1 | 54.1 |
Chemical and material processing | Sealing Technologies | ||||
Disaggregation of Revenue | ||||
Net sales | 19.1 | 17.5 | 59.1 | 54.1 |
Chemical and material processing | Advanced Surface Technologies | ||||
Disaggregation of Revenue | ||||
Net sales | 0 | 0 | 0 | 0 |
Food and pharmaceutical | ||||
Disaggregation of Revenue | ||||
Net sales | 17.6 | 16.8 | 55.1 | 49.8 |
Food and pharmaceutical | Sealing Technologies | ||||
Disaggregation of Revenue | ||||
Net sales | 17.6 | 16.8 | 55.1 | 49.8 |
Food and pharmaceutical | Advanced Surface Technologies | ||||
Disaggregation of Revenue | ||||
Net sales | 0 | 0 | 0 | 0 |
General industrial | ||||
Disaggregation of Revenue | ||||
Net sales | 46.8 | 48.1 | 144.7 | 147.9 |
General industrial | Sealing Technologies | ||||
Disaggregation of Revenue | ||||
Net sales | 40 | 40.9 | 123.5 | 128.5 |
General industrial | Advanced Surface Technologies | ||||
Disaggregation of Revenue | ||||
Net sales | 6.8 | 7.2 | 21.2 | 19.4 |
Medium-duty/heavy-duty truck | ||||
Disaggregation of Revenue | ||||
Net sales | 51.7 | 43.2 | 139.9 | 129.7 |
Medium-duty/heavy-duty truck | Sealing Technologies | ||||
Disaggregation of Revenue | ||||
Net sales | 51.7 | 43.2 | 139.9 | 129.7 |
Medium-duty/heavy-duty truck | Advanced Surface Technologies | ||||
Disaggregation of Revenue | ||||
Net sales | 0 | 0 | 0 | 0 |
Oil and gas | ||||
Disaggregation of Revenue | ||||
Net sales | 7.1 | 5.6 | 19.4 | 17.6 |
Oil and gas | Sealing Technologies | ||||
Disaggregation of Revenue | ||||
Net sales | 5.5 | 4.6 | 16.1 | 14.2 |
Oil and gas | Advanced Surface Technologies | ||||
Disaggregation of Revenue | ||||
Net sales | 1.6 | 1 | 3.3 | 3.4 |
Power generation | ||||
Disaggregation of Revenue | ||||
Net sales | 8.7 | 8.5 | 31.7 | 29.2 |
Power generation | Sealing Technologies | ||||
Disaggregation of Revenue | ||||
Net sales | 8.7 | 8.4 | 31.6 | 29.1 |
Power generation | Advanced Surface Technologies | ||||
Disaggregation of Revenue | ||||
Net sales | 0 | 0.1 | 0.1 | 0.1 |
Semiconductors | ||||
Disaggregation of Revenue | ||||
Net sales | 113.4 | 55.8 | 332.2 | 158.7 |
Semiconductors | Sealing Technologies | ||||
Disaggregation of Revenue | ||||
Net sales | 1.9 | 3.3 | 4.4 | 13.4 |
Semiconductors | Advanced Surface Technologies | ||||
Disaggregation of Revenue | ||||
Net sales | 111.5 | 52.5 | 327.8 | 145.3 |
Other | ||||
Disaggregation of Revenue | ||||
Net sales | 2.2 | 2.4 | 7.9 | 7.9 |
Other | Sealing Technologies | ||||
Disaggregation of Revenue | ||||
Net sales | 1.6 | 1.8 | 5.6 | 5.9 |
Other | Advanced Surface Technologies | ||||
Disaggregation of Revenue | ||||
Net sales | $ 0.6 | $ 0.6 | $ 2.3 | $ 2 |
Derivatives and Hedging (Detail
Derivatives and Hedging (Details) € in Millions | Sep. 15, 2022 USD ($) | Sep. 30, 2022 USD ($) | May 31, 2019 USD ($) | May 31, 2019 EUR (€) | Sep. 30, 2018 USD ($) | Sep. 30, 2018 EUR (€) |
Original Swap | ||||||
Derivative | ||||||
Derivative liability, notional amount | $ 200,000,000 | |||||
Amount of hedged item | € | € 172.8 | |||||
Weighted average interest rate (as a percent) | 2.80% | 2.80% | ||||
Derivative cash | $ 30,800,000 | |||||
Fair value contracts | 27,400,000 | |||||
Interest receivable | 3,400,000 | |||||
Unrealized gains | $ 20,800,000 | |||||
Additional Swap | ||||||
Derivative | ||||||
Derivative liability, notional amount | $ 100,000,000 | |||||
Amount of hedged item | € | € 89.6 | |||||
Weighted average interest rate (as a percent) | 3.50% | 3.50% | ||||
Derivative asset, noncurrent | $ 15,800,000 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Foreign currency derivatives | $ 15.8 | $ 8.7 |
Deferred compensation assets | 9.6 | 10.9 |
Assets | 25.4 | 19.6 |
Liabilities | ||
Deferred compensation liabilities | $ 9.9 | $ 11.4 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Carrying Value of Financial Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value Disclosures [Abstract] | ||
Carrying Value | $ 883.6 | $ 976.6 |
Fair Value | $ 870.1 | $ 998.3 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Summary of Changes in Accumulated Other Comprehensive Income by Component (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Accumulated Other Comprehensive Income | ||||||||
Beginning balance | $ 1,270.3 | $ 1,270.3 | ||||||
Other comprehensive income (loss) before reclassifications | $ (33.3) | $ (1.2) | (62.1) | $ 2.5 | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | 0.2 | 0.2 | 0.4 | 0.5 | ||||
Net current-period other comprehensive income (loss) | (33.1) | (1) | (61.7) | 3 | ||||
Less: other comprehensive income (loss) attributable to redeemable non-controlling interests | (1.8) | 0.2 | (3.8) | 0.3 | ||||
Net current-period other comprehensive income (loss) attributable to EnPro Industries, Inc. | (31.3) | (1.2) | (57.9) | 2.7 | ||||
Ending balance | 1,267.8 | 1,267.8 | ||||||
Total | ||||||||
Accumulated Other Comprehensive Income | ||||||||
Beginning balance | (12) | 14.6 | (1) | $ (4.9) | 14.6 | (4.9) | ||
Net current-period other comprehensive income (loss) | (31.3) | $ (14.9) | (11.7) | (1.2) | $ 11.8 | (7.9) | ||
Ending balance | (43.3) | (12) | (2.2) | (1) | (43.3) | (2.2) | ||
Unrealized Translation Adjustments | ||||||||
Accumulated Other Comprehensive Income | ||||||||
Beginning balance | 19.9 | 46.7 | 35.3 | 31.7 | 46.7 | 31.7 | ||
Other comprehensive income (loss) before reclassifications | (33.3) | (1.2) | (62.1) | 2.5 | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 | 0 | 0 | ||||
Net current-period other comprehensive income (loss) | (33.3) | (1.2) | (62.1) | 2.5 | ||||
Less: other comprehensive income (loss) attributable to redeemable non-controlling interests | (1.8) | 0.2 | (3.8) | 0.3 | ||||
Net current-period other comprehensive income (loss) attributable to EnPro Industries, Inc. | (31.5) | (1.4) | (58.3) | 2.2 | ||||
Ending balance | (11.6) | 19.9 | 33.9 | 35.3 | (11.6) | 33.9 | ||
Pension and Other Postretirement Plans | ||||||||
Accumulated Other Comprehensive Income | ||||||||
Beginning balance | (31.9) | $ (32.1) | (36.3) | $ (36.6) | (32.1) | (36.6) | ||
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 | |||||
Amounts reclassified from accumulated other comprehensive income (loss) | 0.2 | 0.2 | 0.4 | 0.5 | ||||
Net current-period other comprehensive income (loss) | 0.2 | 0.2 | 0.4 | 0.5 | ||||
Less: other comprehensive income (loss) attributable to redeemable non-controlling interests | 0 | 0 | 0 | 0 | ||||
Net current-period other comprehensive income (loss) attributable to EnPro Industries, Inc. | 0.2 | 0.2 | 0.4 | 0.5 | ||||
Ending balance | $ (31.7) | $ (31.9) | $ (36.1) | $ (36.3) | $ (31.7) | $ (36.1) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Summary of Reclassifications Out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income | ||||
Other income (expense) | $ 0.3 | $ 16.7 | $ (1.7) | $ 18.6 |
Tax benefit | (9.1) | (13.6) | (19.8) | (14.8) |
Net income | 27.5 | 28 | 78.9 | 75.5 |
Reclassification Out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | ||||
Income before income taxes | 0.2 | 0.3 | 0.5 | 0.7 |
Tax benefit | 0 | (0.1) | (0.1) | (0.2) |
Net income | 0.2 | 0.2 | 0.4 | 0.5 |
Reclassification Out of Accumulated Other Comprehensive Income | Actuarial losses | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | ||||
Other income (expense) | 0.2 | 0.3 | 0.5 | 0.6 |
Reclassification Out of Accumulated Other Comprehensive Income | Prior service costs | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | ||||
Other income (expense) | $ 0 | $ 0 | $ 0 | $ 0.1 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | 1 Months Ended | 9 Months Ended | |||||||
Apr. 14, 2021 USD ($) mi | Jun. 30, 2018 site | Mar. 03, 2016 USD ($) | Apr. 11, 2014 USD ($) mi | Oct. 31, 2016 USD ($) | Sep. 30, 2022 USD ($) site party mine mi | Dec. 31, 2021 USD ($) | Oct. 18, 2021 | Apr. 30, 2015 USD ($) | |
Site Contingency | |||||||||
Number of sites subject to remediation (sites) | site | 19 | ||||||||
Number of sites, cost in excess of 100K (sites) | site | 12 | ||||||||
Cost per site minimis threshold | $ 100,000 | ||||||||
Number of sites, discontinued operations (sites) | site | 17 | ||||||||
Number of sites, active operations (sites) | site | 2 | ||||||||
Number of sites, investigation completed (sites) | site | 16 | ||||||||
Number of sites investigation in progress (sites) | site | 3 | ||||||||
Environmental loss accrual | $ 37,900,000 | $ 46,400,000 | |||||||
Environmental | $ 11,000,000 | $ 11,000,000 | |||||||
Lower Passaic River | |||||||||
Site Contingency | |||||||||
Portion of site subject to remediation (miles) | mi | 8 | ||||||||
Number of other potentially responsible parties | 120 | 70 | |||||||
Estimate of cost | $ 726,000,000 | ||||||||
Estimate low end | $ 165,000,000 | ||||||||
Estimated development time | 4 years | ||||||||
Upper Nine Miles of the River | |||||||||
Site Contingency | |||||||||
Portion of site subject to remediation (miles) | mi | 9 | ||||||||
Site contingency, loss exposure in excess of accrual best estimate | $ 441,000,000 | ||||||||
Lower Eight Miles of River | |||||||||
Site Contingency | |||||||||
Environmental loss accrual | $ 700,000 | ||||||||
Settlement payment | 5,900,000 | ||||||||
Arizona Uranium Mines | |||||||||
Site Contingency | |||||||||
Environmental loss accrual | $ 13,300,000 | ||||||||
Investigative sites notice from EPA | mine | 8 | ||||||||
Percentage of expenses reimbursable by the U.S. | 35% | ||||||||
Future contributions from U.S. | $ 3,300,000 | ||||||||
Minimum | Lower Passaic River | |||||||||
Site Contingency | |||||||||
Site contingency, loss exposure in excess of accrual best estimate | $ 1,380,000,000 | $ 953,000,000 | |||||||
Maximum | Lower Passaic River | |||||||||
Site Contingency | |||||||||
Site contingency, loss exposure in excess of accrual best estimate | $ 1,730,000,000 | ||||||||
Affiliated Entity | Crucible Steel Corporation | |||||||||
Site Contingency | |||||||||
Number of sites subject to remediation (sites) | site | 19 | ||||||||
Portion of site subject to remediation (miles) | mi | 17 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Changes in Carrying Amount of Product Warranty Liability (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Movement in Standard Product Warranty Accrual | ||
Balance at beginning of year | $ 4.9 | $ 6.5 |
Net charges to expense | 0.9 | 1.4 |
Settlements made | (0.8) | (2) |
Balance at end of year | $ 5 | $ 5.9 |