Q3 2024 Enpro Inc Earnings Call Transcript
Key Points
- Enpro Inc (NPO) reported a year-over-year increase in third-quarter sales, with a slight organic growth despite market softness.
- The company's Sealing Technologies segment achieved a 4.5% sales growth and expanded adjusted EBITDA margins by 300 basis points to 32.7%.
- Aftermarket solutions, which provide stability, comprised 54% of Enpro's revenue year-to-date.
- Enpro's balance sheet remains strong, with a net leverage ratio of 1.8 times trailing 12-month adjusted EBITDA.
- The company continues to pursue strategic growth investments and acquisitions, supported by strong free cash flow generation.
- Enpro Inc (NPO) adjusted its full-year 2024 earnings guidance downward due to slower-than-expected sales in the Advanced Surface Technologies (AST) segment.
- The semiconductor market remains choppy, with slow capital equipment spending impacting AST's profitability.
- Commercial vehicle OEM sales in the Sealing Technologies segment experienced steep declines.
- Free cash flow year-to-date decreased to approximately $83 million from $134 million last year, primarily due to working capital timing and higher cash tax payments.
- The company expects continued weakness in commercial vehicle OEM sales and slow demand conditions in AST to persist into 2025.
Greetings, and welcome to the Enpro Q3 2024 earnings conference call. (Operator Instructions) A brief question-and-answer session will follow the formal presentation. (Operator Instructions)As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host, James Gentile. Thank you. You may begin.
Thanks, Irene, and good morning, everyone. Welcome to Enpro's third-quarter 2024 earnings conference call. I will remind you that our call is being webcast at empro.com, where you can find the presentation that accompanies this call. With me today is Eric Vaillancourt, our President and Chief Executive Officer; and Joe Bruderek, Executive Vice President and Chief Financial Officer.
During today's call, we will reference a number of non-GAAP financial measures. Tables reconciling the non-GAAP measures to the comparable GAAP measures are included in the appendix to the presentation materials. Also, a friendly reminder that we will be making statements on this
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