Q2 2024 Enpro Inc Earnings Call Transcript
Key Points
- Enpro Inc (NPO) achieved strong profitability in the Sealing Technologies segment with adjusted segment EBITDA margin exceeding 35%.
- Consolidated adjusted EBITDA margins exceeded 27% for the first time, showcasing effective cost management and strategic pricing.
- The company reported sequential improvement in both sales and adjusted segment EBITDA in the Advanced Surface Technologies (AST) segment.
- Enpro Inc (NPO) maintained a strong balance sheet with a net leverage ratio of approximately two times trailing 12-month adjusted EBITDA.
- The company continues to invest in strategic growth opportunities, both organically and through acquisitions, to drive long-term high-margin growth.
- Sales decreased by 1.8% year-over-year, with organic sales declining 5%, primarily due to softness in the AST segment.
- Revenue in the AST segment declined 12% year-over-year, reflecting ongoing challenges in the semiconductor market.
- Free cash flow in the first half of 2024 was $35.5 million, down from $66.5 million in the previous year, due to timing of working capital and higher cash tax payments.
- The company adjusted its full-year 2024 revenue guidance to be approximately flat compared to 2023, citing slower-than-expected recovery in semiconductor capital equipment.
- Capital expenditures are expected to be lower than initially planned, with some spending pushed into 2025 due to supplier lead times and delivery schedules.
Hello and welcome to the Enpro Q2 2024 Earnings Conference Call and Webcast. (Operator Instructions) As a reminder, this conference is being recorded.
It's now my pleasure to turn the call over to James Gentile, Vice President, Investor Relations. Please go ahead, James.
Thank you and good morning, everyone. Welcome to Enpro's second quarter 2024 earnings conference call. I will remind you that our call is being webcast at enpro.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 historical 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 call that are not historical facts and
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